A recent case in Florida federal court provides a reminder of how important it is to plead sufficient allegations against every defendant, even unidentified John Does. COR Clearing, LLC v. Investorhub.com, Inc., Case No. 4:16-mc-00013-RH-CAS (N.D. Fla. May 11, 2016) is a case about unmasking anonymous Internet posters, but because the plaintiff was sloppy in its allegations, the court was able to deny its request to identify the posters without substantially addressing the First Amendment.
The plaintiff, COR, filed a suit in Nebraska federal court against a company called Calissio Resources Group, Inc. (and other agents/employees), alleging that Calissio defrauded COR of over $4 million by giving dividends to shareholders who were not entitled to them. COR claimed that this was a tightly-knit conspiracy among the named defendants. Although COR named Doe defendants in this suit, it did not direct any allegations at them or try to identify them, and even specified that it was not asserting any claims against Calissio’s shareholders.
After starting the Nebraska suit, COR opened a miscellaneous case in Northern District of Florida to send a Rule 45 subpoena to Investorhub seeking the identities of anonymous posters on its web site, which hosts several finance and investment forums. COR did this because it alleged that anonymous posts on one of Investorhub’s message boards provided evidence of who improperly received dividends. According to COR, the named defendants had vanished, and so the only way it could recover the unjustly paid money was to determine the identities of these message board posters and bring an unjust enrichment claim against them. The problem with this theory, as the court ultimately found, was that COR did not make any allegations against the John Doe defendants that would have supported an unjust enrichment claim.
Investorhub refused to produce the subpoenaed documents, arguing that the First Amendment protects the right to speak anonymously. COR then filed a motion to compel production of these documents.
The court recognized that people have a right to speak anonymously, even on the Internet, but that anonymous speech is not protected when it constitutes fraud. What complicated the question, however, is that the anonymous posters on Investorhub were not parties to COR’s civil suit. This was not related to a criminal investigation, and the identities of the posters would not provide evidence establishing the allegedly fraudulent scheme, since COR never alleged that there was anything unlawful about the content of the anonymous messages.
In denying the motion to compel, the court recognized that: “[t]he First Amendment right implicated here is not inconsequential.” (Order at 11.) But this conclusion did not follow an in-depth balancing analysis, even though the court recited the First Amendment balancing standards in anonymous speech cases, as laid out in Doe v. Cahill, 884 A.2d 451 (Del. 2005) and Dendrite Int’l, Inc. v. Doe No. 3, 342 N.J. Super. 134, 140-41 (N.J. App. Div. 2001).
Instead, it found dispositive the fact that the anonymous posts, and the identities of these posters, did not relate to allegations against the named defendants, and that there were essentially no allegations against the unidentified John Doe defendants. COR could have potentially avoided this outcome, then, if it had properly pled an unjust enrichment claim against the John Doe defendants in the Nebraska case. COR may still be able to do this by amending its complaint in Nebraska and then issuing another subpoena in Florida, but it would have to satisfy the strict requirements of the First Amendment to obtain the identities of the anonymous posters.
