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TEAM Loses Internet Free Speech Appeal Vs. Amway/Quixtar
#1



Court: Anonymous Web posts bring limits to commercial free speech


By Cy Ryan (contact)

Monday, July 12, 2010 | 2:43 p.m.

CARSON CITY – A federal appeals court has ruled that the constitutional right of free speech is limited in cases of anonymous comments on the Internet made about the practices of private business.

The U.S. Ninth Circuit Court of Appeals said the constitutional protection “varies depending on the circumstances and the type of speech at issue.”

The court, which held oral arguments in the case in Las Vegas in March, affirmed the decision of Senior U.S. District Judge Edward Reed in the battle between Quixtar and Signature Management TEAM, LLC.

The court, in an opinion written by Judge M. Margaret McKeown, said “Given the importance of political speech in the history of this country, it is not surprising that courts afford political speech the highest level of protection.”

But McKeown, quoting from another court’s decision, wrote, “Commercial speech on the other hand, enjoys a limited measure of protection, commensurate with its subordinate position in the scale of First Amendment values…”

Quixtar, successor to Amway Corporation, markets cosmetics, nutritional supplements and other products. It sued Signature, where two former Quixtar employees work. Quixtar claims former employees Orrin Woodward and Chris Brady had non-competition clauses in their contracts and suits are under way on the issue.

In these suits, Quixtar claimed that a smear campaign was carried on by Signature and it sought to find out who was behind it. These anonymous complaints on the Internet included allegations that Quixtar secretly acknowledges its products are overpriced, they don’t meet FTC rules and the company suffers from systemic dishonesty.

In depositions in these non-competition suits, Quixtar sought to force TEAM employee Benjamin Dickie to reveal the identity of five anonymous online commenters who allegedly made the defamatory comments about Quixtar. Dickie refused.

Judge Reed ordered Dickie to reveal the names of three of the speakers but said the other two could be kept confidential. An appeal was filed and the circuit court upheld Reed.

McKeown said there have been a number of these cases and she wrote, “Anonymous online speech is an increasingly important issue in the commercial context, particularly in light of the ubiquity of the Internet.”

Relying on prior court decisions, the court said the party suing to get the names of the anonymous online speakers must submit sufficient evidence that it has been harmed by the comments.

In a footnote, the court said some speech, such as fighting words and obscenity, is not protected by the First Amendment. Fighting words, the court said, are that “by their very utterance inflict injury or tend to incite an immediate breach of peace.”


http://www.lasvegassun.com/news/2010/jul...mmercial-/

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I am glad to see at least that there is a high bar set here.... that Amway or any other company can't simply sue online critics because they don't like what they say. Amway had to show specific comments and prove that they were financially hurt by the comments.
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#2


Court Upholds Order Unmasking Three Online Critics

by Wendy Davis, 21 minutes ago

In the latest court ruling addressing Web users' right to remain anonymous, the 9th Circuit Court of Appeals on Monday upheld an order unmasking three Web users, but preserving the confidentiality of two others.

The dispute involved the Amway successor Quixtar and a Quixtar offshoot called Signature Management TEAM. Quixtar alleged that TEAM members were trashing Quixtar online, by posting anonymous comments about the company like "Quixtar currently suffers from systemic dishonesty," and "Quixtar is aware of, approves, promotes, and facilitates the systematic noncompliance with the FTC's Amway rules."

While Quixtar sought to learn the identity of five commenters, a trial judge found that the company had only shown that it could potentially obtain summary judgment -- meaning that its case appeared strong -- against three of the speakers.

Quixtar argued that the judge used too high a standard for unmasking and should have ordered all five of the critics identified. The commenters, on the other hand, argued that the trial judge didn't adequately consider their right to speak anonymously.

The 9th Circuit ultimately upheld the trial judge, but the opinion also says that the statements about Quixtar were "commercial" and, therefore, less deserving of protection than comments that are purely "political."

In general, commercial speech, like ads, is less protected by the First Amendment than political or editorial speech, like newspaper articles. That's one reason why the Federal Trade Commission can issue guidelines for marketers, but the authorities typically can't tell news outlets what to report.

The appellate judges reasoned that the statements in question are "commercial" because they go "to the heart of Quixtar's commercial practices and its business operations."

That conclusion seems disturbing, however. If criticizing another company's business operations is "commercial speech," then every post on a gripe site could be considered commercial. Additionally, from the ruling issued today, it appears that at least some of the comments mentioned in the opinion -- like whether a company is complying with an FTC settlement -- relate to matters of public importance. Even if those comments are "commercial speech," it's hard to see why those particular statements should be entitled to less First Amendment protection than any other remarks.
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#3
If the statements are accurate or are a matter of opinion, then fine.
But if the statements are inaccurate, and damage the reputation of a company on falsities, then anonymity doesn't cut it. Someone needs to be held accountable for such damage.
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#4
This is actually a landmark decision in internet-related law in the US. The first amendment offers no rock to hide under for online critics.
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#5
Bridgett Wrote:If the statements are accurate or are a matter of opinion, then fine.
But if the statements are inaccurate, and damage the reputation of a company on falsities, then anonymity doesn't cut it. Someone needs to be held accountable for such damage.


First of all, the only thing Amway has won at this time is the right to know the bloggers' names.

In a subsequent case they will have to prove to a court that those particular comments were false and that Amway was harmed financially by them.

If these statements were made after most of the Team members quit Amway's job just got harder.

Secondly how does Amway prove this some of these statement are false? "There is systematic dishonesty in Quixtar." That sounds more like an opinion to me.

Lastly if MonaVie or Woodward sued AmwayTalk to find out the identities of posters here who have made sililiar statements made about them on this forum, how would everyone feel about it then?


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If Amway is forced to prove intent in this commercial case it would raise the bar even further. In the US slander and lible cases the plaintiff must prove intent which is nearly impossible and why they are rarely successful in this country versus certain European countries. Who knows.

Just be careful what you say about other companies.
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#6
MichMan Wrote:First of all, the only thing Amway has won at this time is the right to know the bloggers' names.


Three of five they were chasing.

Quote:In a subsequent case they will have to prove to a court that those particular comments were false and that Amway was harmed financially by them.

It appears the court thought they could do that for three of the five.
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#7
crownchaitu Wrote:But would it be applicable to some of the others who deliberately attack Amway - at least in the US??
Genuine criticism is needed and can be very very helpful in correcting the not so proper practices.
I know that ultimately it will be for the courts to determine what's genuine and what's a commercial attack.
I just want to know if this judgment is broad enough to include some of the other more malicious critics who do nothing more than spread falsities about Amway.


I can't see why it wouldn't? They've basically said "free speech" doesn't protect you if you're attacking a company. No what isn't clear from the reports is whether they were considering this as commercial entity vs commercial entity or private individuals vs commercial entity
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#8
IBOFB, here's the million dollar question:

If AmwayTalk was sued by MonaVie or Woodward to reveal the identities of individuals on this forum for statements made about TEAM, how quickly would you identify people here?
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#9
ibofightback Wrote:
MichMan Wrote:In a subsequent case they will have to prove to a court that those particular comments were false and that Amway was harmed financially by them.


It appears the court thought they could do that for three of the five.


It appears the court will allow a case to be brought against those people. But winning the case is a different story.

Courts have allowed a lot of suits by Amway against internet critics. But Amway has lost most, if not all of them.
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#10
MichMan Wrote:Courts have allowed a lot of suits by Amway against internet critics. But Amway has lost most, if not all of them.


I'm not aware on any cases specifically against internet critics, let alone "a lot". Care to name them?
 Reply
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