Ooooops!

Foteos Macrides macrides at sci.wfeb.edu
Fri Mar 18 16:28:42 EST 1994


In article <2lj7kh$ij at net.bio.net>, kristoff at net.bio.net (David Kristofferson)
writes:
>>
>>kristoff at net.bio.net (David Kristofferson) wrote:
>>
>>>>> *** I CAUTION READERS*** that libel laws *do* apply to anything that
>>>>> you decide to post, so those who feel that they can say anything with
>>>>> impunity on the newsgroups are seriously deluding themselves.
>>
>>I'm curious to know who you were refering to, Dave, since you've said
>>it wasn't Steve Modena.  Please explain.
> 
> The text above says in large print "I CAUTION READERS" which, being
> plural, means everyone reading the message.  It is not a reference to
> an individual but a general warning to all that libel laws can apply
> to postings on the net.  I am concerned in general that too many
> people believe that they can shoot their mouths off without
> consequence on the net and am trying to warn everyone in advance that
> freedom is not unlimited.
> 
>>
>>
>>Kris Carroll <kcarroll at u.washington.edu> wrote:
>>
>>>>Politely, I disagree with this portion of your post. ... Can you
>>>>provide additional information or proof?
>>
>>David Kristofferson <kristoff at net.bio.net> replied:
>>
>>>Thank you for politely disagreeing, especially when manners seem to be
>>>out of fashion on the "Information Superhighway."
>>>
>>>This lack of knowledge about these issues is widespread unfortunately
>>>and is why I posted this item in CAPS.  Legal tests have in fact been
>>>made.  I refer you to "Internet World" magazine which had an article
>>>by a legal expert a few months back on this very issue and cited a
>>>specific case.  Unfortunately my copy of the magazine issue in
>>>question is at home, not here in the office, so I can't give you the
>>>precise reference.  Look in the Nov. 93 issue (plus or minus two
>>>months).  I'll look it up when I get home tonight (hopefully before
>>>midnight).  I wouldn't have made the statement quoted above,
>>>especially not in CAPS, if I had not already read about this issue
>>>which is something that obviously concerns managers of newsgroup
>>>networks.
>>
>>This paragraph is not very informative.  For those of us who don't get
>>this magazine, Dave, please give the citation you promised last week,
>>and perhaps a summary of the problem it addresses?
>>
> 
> I tried to find this issue that very night, but unfortunately all my
> back issues are buried in one of many boxes somewhere in my garage
> (had to move all my books and mags recently), and I didn't have time
> to dig it out.  The article discussed an instance of a libel suit due
> to postings on the net.  In particular it noted that it is the person
> posting the message who is responsible, not the operators of
> electronic newsgroup services, because there is no editorial approval
> process involved.
> 
> For anyone who is really interested, I would suggest a trip to your
> university library and scan through back issues of "Internet World"
> between Aug.  - Dec. 1993.  If you don't get this magazine and are an
> Internet user, I recommend it.  I also note that I have no connection
> with the magazine or its publishers.
>[...]


Dave,
	I fetched this via URL:

	gopher://gopher.wired.com:70/00/Etext/1.3/departments/electric.word

Is it summary of the law suit discussed in the INTERNET WORLD article?


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WIRED 1.3
Electric Word
*************

When Modems Squawk, Wall Street Listens
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
A lawsuit involving a New Jersey maker of high-tech health-care equipment
and a vocal Prodigy user is highlighting the fuzzy lines that participants
of online services may cross when "discussing" a company's performance.

MEDphone Corp. is suing Peter DeNigris in New Jersey Federal Court for
making disparaging online comments that supposedly sent MEDphone's public
stock price plummeting. MEDphone, which makes a device that enables
cardiac specialists to jump-start heart attack victims immediately over
phone lines, claims that DeNigris's verbal attacks on Prodigy plunged the
previously healthy company into serious financial trouble. Almost as soon
as the online community became interested in the MEDphone case, the
Electronic Frontier Foundation issued a statement that the suit was of
little significance because Prodigy itself was not sued by MEDphone.
DeNigris, like any other person, can be sued for his own libelous
statements whether online or off.

But despite EFF's clarification of libel law, the online services industry
continues to watch the MEDphone case keenly. Its interest was further
stirred when DeNigris's law firm recently delivered subpoenas to Prodigy,
asking for contact information for some other participants in the Money
Talk section where DeNigris made most of his comments. Prodigy turned over
the requested information with little hesitation.

Tom Chansky, DeNigris's attorney, says he only sought affidavits showing
that DeNigris's comments were not taken seriously enough by other Money
Talk participants to distort the price of publicly traded MEDphone stock.
But after delivering the subpoenas, he noticed an insidious side effect:
The previously lively discussion of MEDphone in the Money Talk section
immediately died off. As we go to press, DeNigris is pondering a First
Amendment counterclaim against MEDphone, alleging that MEDphone may well
have engineered the chilling effect.

Another question raised by the MEDphone suit is the market power of
seemingly innocuous online discussions. Does this case signal the opening
of a major fault line in the stability of the securities markets? Do large
online services such as Prodigy give anyone with a modem and an opinion -
including possibly meddlesome brokers - the ability to shoot down stock
prices of companies like MEDphone with a disapproving word or two? If a
New York firm makes an offer on a national online service aimed at other
New Yorkers, will receipt of that information by callers from other states
bring those states' securities laws into play? When callers to a bulletin
board system share their opinions about investment matters online, at what
point do their activities constitute the rendering of investment advice,
and thus require federal registration? There are no clear answers in
sight, though a profusion of such questions is assured.

 - Lance Rose, Esq.


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 Foteos Macrides           Worcester Foundation for Experimental Biology
 MACRIDES at SCI.WFEB.EDU     222 Maple Avenue, Shrewsbury, MA 01545
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