Equidyne Corporation sued several anonymous posters alleging that, in violation of their employment agreements, they posted confidential inside information on the Raging Bull and Yahoo! Message boards about Equidyne. After one of the Does, Aeschylus_2000, moved to quash arguing that he was not an employee, Equidyne changed theories and argued that, by urging viewers to give their proxies to a recently announced slate of challengers for the company’s board, Aeschylus has violated the SEC’s proxy rules both by not disclosing his identity, his shareholdings, and similar data, and by supporting a slate that has itself not complied with the disclosure rules. The district judge agreed to apply a standard similar to the one adopted by the New Jersey courts in Dendrite v. Doe, but found that Equidyne had shown a prima facie case under federal securities laws, and that the prima facie case did not include a showing of actual damages. Our amicus brief urged the Third Circuit to adopt New Jersey’s Dendrite standard, to require trial judges to observe the Dendrite procedures more scrupulously, and to send the case back for more careful consideration of whether disclosure is proper under that rule
After new leadership was elected to plaintiff’s board, the lawsuit was dropped and the Does remained anonymous.