This case deals with whether a third party has standing to assert constitutional defenses to the discovery of one's identity on the internet. Cases of Interest >  Cyberlaw Cases of Interest >  Cyberlaw >  Privacy

Matrixx Initiatives Inc v. Doe

1. Case name:
Matrixx Initiatives, Inc. v. Doe

2. Case cite:
138 Cal.App.4th 872 (Cal. App. 6th Dist. 2006); 2006 LEXIS 544

3. Facts:
Plaintiff-Appellee, Matrixx Initiatives, Inc. (“Plaintiff”), a pharmaceutical company with its principal place of business in Arizona, sued a number of persons-five named individuals and twenty-five “John Doe” persons-for defamation, interference with contractual relations and “business expectancies,” and trade libel as a result of certain postings made by such individuals on an Internet message board, which is accessed through the Yahoo! Finance and Silicon Investor Web sites. In February 2004, Plaintiff served subpoenas on Yahoo! to compel same to provide information about two particular anonymous posters on such message board, and Yahoo! complied. However, due to certain screening software employed by these individuals, their identities were initially unable to be discovered. Thereafter, one of the posters failed to use such screening software prior to utilizing the message board, which allowed Plaintiff to track this particular poster to Barbary Coast Capital Management, LLC, a hedge fund managed by Stephen L. Worthington (collectively “Worthington”). Mr. Worthington was deposed in California respecting the identities of the authors of the allegedly defaming posts, but he refused to answer any related questions on the grounds that anonymous posters of information on the Internet are entitled to First Amendment Protection.

4. Procedural posture:
This action was initiated in Maricopa County, Arizona, but Plaintiff moved to compel discovery, specifically, Mr. Worthington’s deposition answers, in Santa Clara County, California. The trial court granted Plaintiff’s motion and Worthington appealed, asserting a First Amendment defense on behalf of the third-party posters. At such appellate level, Plaintiff contended that Worthington lacked standing to invoke the constitutional rights of third parties.

5. Holding:
The Appellate Court affirmed the trial court’s order to compel Mr. Worthington’s deposition answers on the grounds that Worthington lacked standing to assert constitutional challenges to such compulsion of discovery because: 1) Worthington was not a party in the underlying cause of action for which discovery was sought; 2) no “close relationship” existed between Worthington and the anonymous posters; and 2) no “hindrance” existed to the ability of the posters to protect their own interests. The Court did not decide the merits of Worthington’s appeal, as the procedural issue was dispositive.

6. Important dicta:
The Court devoted a large portion of its brief opinion to the fact that standing is of such a fundamental nature to a lawsuit and to our constitutional guarantees that, in certain circumstances, it need not be raised below to be preserved on appeal.

7. Likely future importance or unanswered questions:
Because the Court failed to reach the merits of Worthington’s appeal, a question remains in this Circuit as to whether Plaintiff’s need to ascertain information respecting the identities of certain allegedly defaming posters outweighs Internet users’ free speech rights.

8. Critical analysis:
The Court distinguished from the case at bar In re Verizon Internet Services, Inc., 257 F. Supp. 2d 244 (D.D.C. 2003), which held that Verizon had standing to challenge the Digital Millennium Copyright Act of 1998 (“DMCA”) on behalf of its users because a “close relationship” existed between such parties and it was necessary for Verizon to protect its clients so it may, in essence, stay in business. In Verizon, an ISP sought to quash a subpoena issued by the Recording Industry Association of America under the DMCA, and the Court likewise found that Verizon had standing to assert its customers’ constitutional rights because of the nature of the parties’ relationship-service provider and its customers. Here, Worthington did not exhibit such nexus sufficient to warrant a finding of standing, as Worthington is not an ISP seeking to protect its customers’ identities to ensure its efficacy in the market.

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