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Med Express v. Nicholls

Topic(s): Internet Free Speech - Miscellaneous
Court: State

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After eBay seller Med Express sued two customers for libel on the theory that posting truthful criticisms of their experiences buying equipment had hurt its reputation, and moved for a temporary restraining order commanding removal of the comments from eBay,  Public Citizen helped the defendants find pro bono lawyers, and Med Express dismissed its complaint against them without prejudice.  Public Citizen represents the defendants in contending that the suit and  TRO motion were so frivolous as to warrant an award of attorney fees for their pro bono lawyers.

The sanctions motion was tried to the court in January, 2014. At the hearing, Med Express’s owner Richard Radey testified that he had actually sat at his computer and watched as each defendant entered detailed seller ratings of “1” in each of four categories; its counsel argued that there was a reasonable basis for contending that these DSR entries were false statements of fact that could be litigated as defamation. However, eBay then produced documents summarizing electronic records showing that Radey’s testimony about the DSR’s was false. Defendants then filed a post-trial brief, but also moved for leave to supplement the record on the sanctions issue by adding the eBay documents, and filed. At the hearing on that motion, the Court urged both sides to try to settle the case, and Med Express agreed to pay $5500 in attorney fees, on a monthly payment schedule, subject to the obligation to pay all of defendants’ attorney fees if he missed even one payment; the parties also agreed that the settlement about would remain confidential unless Med Express missed payments. The basic outlines of the agreement were described to the Court.

Med Express then refused to sign the settlement agreement to which its attorneys had agreed, and missed the first payment due under the agreement.  Defendants moved to enforce the oral settlement agreement.  The judge held that there was insufficient evidence of a agreement on all the terms of the agreement, but scheduled a second sanctions trial in light of evidence that Med Express had submitted false testimony at the first trial.

Following the second sanctions trial, Med Express’s original lawyer agreed to pay some of the defendant’s attorney fees to settle the sanctions motion, but Med Express refused any settlement. The trial court decided that the lawsuit was frivolous and accordingly awarded sanctions in the amount of nearly $20,000 in attorney fees and expenses.