Court: Anonymous Web posts bring limits to commercial free speech

By Cy Ryan

Monday, July 12, 2010 | 2:43 p.m.

CARSON CITY – A federal appeals court has ruled that the constitutional right of free speech is limited in cases of anonymous comments on the Internet made about the practices of private business.

The U.S. Ninth Circuit Court of Appeals said the constitutional protection “varies depending on the circumstances and the type of speech at issue.”

The court, which held oral arguments in the case in Las Vegas in March, affirmed the decision of Senior U.S. District Judge Edward Reed in the battle between Quixtar and Signature Management TEAM, LLC.

The court, in an opinion written by Judge M. Margaret McKeown, said “Given the importance of political speech in the history of this country, it is not surprising that courts afford political speech the highest level of protection.”

But McKeown, quoting from another court’s decision, wrote, “Commercial speech on the other hand, enjoys a limited measure of protection, commensurate with its subordinate position in the scale of First Amendment values…”

Quixtar, successor to Amway Corporation, markets cosmetics, nutritional supplements and other products. It sued Signature, where two former Quixtar employees work. Quixtar claims former employees Orrin Woodward and Chris Brady had non-competition clauses in their contracts and suits are under way on the issue.

In these suits, Quixtar claimed that a smear campaign was carried on by Signature and it sought to find out who was behind it. These anonymous complaints on the Internet included allegations that Quixtar secretly acknowledges its products are overpriced, they don’t meet FTC rules and the company suffers from systemic dishonesty.

In depositions in these non-competition suits, Quixtar sought to force TEAM employee Benjamin Dickie to reveal the identity of five anonymous online commenters who allegedly made the defamatory comments about Quixtar. Dickie refused.

Judge Reed ordered Dickie to reveal the names of three of the speakers but said the other two could be kept confidential. An appeal was filed and the circuit court upheld Reed.

McKeown said there have been a number of these cases and she wrote, “Anonymous online speech is an increasingly important issue in the commercial context, particularly in light of the ubiquity of the Internet.”

Relying on prior court decisions, the court said the party suing to get the names of the anonymous online speakers must submit sufficient evidence that it has been harmed by the comments.

In a footnote, the court said some speech, such as fighting words and obscenity, is not protected by the First Amendment. Fighting words, the court said, are that “by their very utterance inflict injury or tend to incite an immediate breach of peace.”