Many of you may not be aware of this, but my company IEHI, Inc. (I.e. the Mortgage Lender Implode-O-Meter) is involved in two lawsuits. Both are absurd in their own right and work to stifle whistleblowing activities. Both have cost our company a great deal of time and money to defend (And the lawsuits are ongoing).
I won’t go into the details of these cases here, but if you want to know more:
- New Hampshire Judge Orders ML-Implode To Divulge Identities of Anonymous Posters
- The Penobscot SFDPA case: FHA Seller-Funded Down-payment Outfit Sues ML-Implode In Effort To Silence Criticism
Our primary website ml-implode.com is a thorn in the side for many because it takes a sardonic view of the imploding mortgage industry. Ever since the site was founded, way back before most of us had even heard of “subprime,” ML-Implode has broken big news that has made CEOs cringe, often alerting employees to their own company’s impending demise before their managers had bellied up and let the cat out of the bag (a.k.a. “I’m sorry, but we’re all out of a job.”). As distasteful as this function may be to some, we side on getting quality information out as soon as possible so that people can make informed decisions. Sometimes that pisses people off. We do not do it lightly.
As it is, the financial implosion genie has long since escaped the bottle. It’s common knowledge that the world is in a recessioin/depression/stagflation/OMG!WTF!/YGTBFKM! situation, so the fact that a start-up financial news site is getting hammered on by lawsuits has been largely ignored. Fortunately, with the recent Goldman Sachs suing of blogger Mike Morgan and articles like the one from Citizen Media Law Project (excerpted below – read it in full!), there may be a glimmer of hope.
I’m posting all of these thoughts on my personal blog to spread the word that just as we are being sued for not shutting up, your free speech is being attacked. Financial considerations aside, simply being aware of these attacks is important to you. The Internet has made way for little guys to be heard; unfortunately, little guys are still squashed by the big companies who have thousands of dollars to throw at legal fees all in an effort to stifle criticism. First amendment rights are fantastic in theory, but if the rubber doesn’t meet the road in cases like ours, anyone who posts material on the internet (And with Facebook, Twitter, millions of forums and blogs, who doesn’t?) is susceptible to losing everything they’ve worked for to frivolous lawsuits funded by deep pockets (The very deep pockets used to lobby the government for bailout funds or new legal loopholes to exploit).
So take note, and spread the word. Thanks. And here’s The Citizen Media Law Project’s take on our New Hampshire case (which we are appealing):
A reader recently tipped us off to a troubling ruling from a trial court in New Hampshire: The Mortgage Specialists, Inc. v. Implode-Explode Heavy Industries, Inc., No. 08-E-0572 (N.H. Super. Ct. Mar. 11, 2009). In the decision, Justice McHugh of the Superior Court for Rockingham County ordered the publishers of the popular mortgage industry watchdog site, The Mortgage Lender Implode-O-Meter (“ML-Implode”), to turn over the identity of an anonymous source who provided ML-Implode with a copy of a financial document prepared by The Mortgage Specialists, Inc. for submission to the New Hampshire Banking Department. The court also ordered ML-Implode to reveal the identity of an anonymous commenter who allegedly posted defamatory statements about the company and enjoined the website from re-posting the financial document or the allegedly defamatory comments. …
Justice McHugh’s March ruling granted all of the requested relief. He issued an order: (1) prohibiting ML-Implode and its agents from “displaying, posting, publishing, distributing, linking to, [or disseminating] copies and/or images of [the] 2007 Loan Chart and any information or data contained therein”; (2) requiring ML-Implode to “disclose the identity of the individual and/or entity that provided it with the 2007 Loan Chart”; (3) requiring ML-Implode to produce all other documents concerning MSI that ML-Implode received from the source of the 2007 Loan Chart; (4) prohibiting ML-Implode from re-posting the “Brianbattersby” statements; and (5) requiring ML-Implode to disclose the identity of “Brianbattersby.”
Justice McHugh’s decision is troubling on so many levels that it is hard to even list them all, but I will start with its blasé attitude towards the whole matter. The court issued no detailed findings of fact or conclusions of law before issuing the injunction, held no evidentiary hearing (apparently the parties agreed to this), and failed to even specify what cause of action supported its decision to enjoin publication of the 2007 Loan Chart. This latter point is by no means clear, because N.H. Rev. Stat. Ann. § 383:10-b looks like it creates no private right of action against non-government parties like ML-Implode. The court apparently regarded all this formality as unnecessary because MSI sought only injunctive relief not damages, but this is obviously incorrect.
But wait, it gets worse. In its filings with the court, ML-Implode argued extensively that the requested relief constituted an unconstitutional prior restraint on speech, sought information protected by New Hampshire’s qualified reporter’s privilege, and impinged on its users’ First Amendment rights to speak anonymously. The court brushed aside all of these arguments without anything I would characterize as legal analysis. Justice McHugh did not even address whether the New Hampshire reporter’s privilege, which was recognized by the New Hampshire Supreme Court in Opinion of the Justices, 373 A.2d 644 (N.H. 1977), applies to online journalism sites like ML-Implode, and, if so, whether MSI had made the showing needed to overcome the privilege. …
With respect to the allegedly defamatory forum comments, Justice McHugh failed to make any specific findings of fact regarding actual malice, falsity, or reputational harm, so it is hard to accept his ruling as a “final adjudication on the merits” that would justify injunctive relief. Moreover, the court failed to explain why MSI could circumvent the hoary principle that “equity will not enjoin a libel” simply by not asking for damages, and why section 230 of the Communications Decency Act did not block MSI’s claims for injunctive relief with respect to user-submitted content (not an uncontroversial proposition).
Justice McHugh’s opinion is also oblivious to the U.S. Supreme Court’s decision in Bartnicki v. Vopper, 532 U.S. 514 (2001), which casts serious doubt on the constitutionality of punishing the dissemination of truthful material relevant to a matter of public concern when the publisher (as opposed to the source) obtained the information in a lawful manner. True, Bartnicki addressed the constitutionality of imposing money damages for the publication of truthful speech, but enjoining truthful speech seems equally inconsistent with protecting our “‘profound national commitment to the principle that debate on public issues should be uninhibited, robust and wide-open.'” 532 U.S. at 534 (quoting New York Times v. Sullivan, 376 U.S. 254, 270 (1964)).
Instead of tackling all these difficult legal issues, Justice McHugh’s decision focuses its attention elsewhere. Throughout, it appears motivated by a conviction that MSI is not asking for anything unreasonable and that ML-Implode is not being very nice:
Then when [ML-Implode] was asked to disclose the identity of persons or entities that had provided it with unauthorized information and potentially defamatory information [ML-Implode] refused outright. One would have hoped that when a legitimate publisher of information was notified of the fact that certain unauthorized information was given to it which was then published, presumably in good faith, the publisher would, in order to maintain the integrity of its publication, willingly provide the wronged party with the information requested. Instead, [ML-Implode] exhibited a knee-jerk reaction.
This is not a view shared by publishers (big, small, offline, online) or by the law. Counsel for ML-Implode intends to appeal the judgment to the New Hampshire Supreme Court, and there is good reason to believe that the state’s high court will reverse. For now, the decision stands as an excellent example of why we need strong procedural safeguards for courts to follow when deciding whether or not to compel the identification of anonymous speakers, why shield laws that constrain judicial discretion are important, and why constitutional doctrine should limit judicial power to grant prior restraints to such a vanishingly small category of cases.