Digital age defamation: free speech v. freedom from responsibility on the Internet.

• Author: Effland, Matthew S.
• Position: Labor and Employment Law

Damaging comments made by disgruntled employees about company business practices is not a new phenomena. Traditionally, of course, the most damaging and fraudulent of claims could be dealt with through a defamation lawsuit. Often, the mere threat of litigation will cause a single disgruntled speaker to back off his or her slanderous comments. The need to make such threats was -- and is -- often viewed as a necessary (if unfortunate) cost of doing business. Today, however, companies are faced with a disturbing new source of defamation: cyber-slander.

The Internet (or "Net"), heralded as the most significant achievement in human speech since the printing press, has become ground-zero in a legal battle over the First Amendment and the right of individuals to speak (or rather type) anonymously. At its best, the Net is the ultimate conduit for free speech and expression; at its worst, the Net can be a character assassin's greatest weapon.

If a company finds evidence that its employee is slandering it on the evening news, or out front of its building, it is a fairly simple matter to serve that employee with a defamation lawsuit. What happens, though, when the person telling lies about a company to the millions of Net users has no name, no address, and no way of being served? This is the issue that courts have been forced to take up as more and more episodes of cyber-slander have arisen.

The Problem of Cyber-Slander

Erik Hvide, the former chairman and CEO of Hvide Marine Inc., a company doing business in Florida, was ousted from his position in early 1999. Shortly thereafter, Hvide learned that eight anonymous people in a Yahoo! (an Internet service provider, or "ISP") financial chatroom were allegedly making false and derogatory comments about him. Hvide believed that the statements, posted in such a way that anyone with access to the Net could see them, defamed not only him, but also damaged the company's image to the point where it had to file for Chapter 11 bankruptcy protection.

As might be expected, Hvide filed a defamation lawsuit against the eight individuals who had made the allegedly slanderous comments about him in the chatroom. (1) His attorney, however, faced a problem: How do you sue someone who only exists as an electronic name in an ISP's database? The eight people involved in the allegedly defamatory activity did not identify their "real" identities in the chatroom, preferring instead to use Internet aliases such as...