March 10, 2000

Corporate Pest Controls Itself
Terminix Abandons Lawsuit Against Free Speech on the Internet

WASHINGTON, D.C. -- In what amounts to a major victory for free speech rights of consumers on the Internet, Terminix Corporation and its corporate affiliates have abandoned a lawsuit they filed last year aiming to shut down a Web site featuring comments from disgruntled Terminix customers.

The voluntary dismissal of the case is a triumph for the consumer s right to criticize corporations on the World Wide Web, said Paul Alan Levy, a Public Citizen attorney who defended the Californian who launched the Web site.

"Had this case succeeded, it would have encouraged other corporations to sue citizens who create Web sites to publicize their complaints about the way they have been treated," Levy said. "The dismissal of this case without the expense of discovery or trial, on the other hand, sends a message to other companies that the way to respond to criticism is by answering it, not by suing to stop it."

In October, Terminix, the well-known pest control company, along with its parent corporation, ServiceMaster, and several ServiceMaster subsidiaries, sued Carla Virga, a secretary from Yuba City, Calif. Terminix filed the suit in federal court in Memphis, Terminix s hometown, seeking damages and a preliminary injunction against Virga. Virga had created a Web site that criticized Terminix because its inspectors had failed to find problems with a house that she had purchased. The Web site grew into a general forum for consumer criticism of Terminix.

Terminix earlier had sued Virga for defamation in California court, but the lawsuit was thrown out as meritless. After that, Virga expanded the site further, adding a page devoted to criticism of ServiceMaster and its subsidiaries. The corporations responded with the current lawsuit, which alleged that by using their names on her Web page, Virga was violating their trademarks. They alleged that Virga was not entitled either to display their names on the Web site or to list their names among her "meta tags," a form of Internet code that is widely used to describe Web sites in a way that helps people using search engines locate Web pages in which they may be interested. Although Virga s site is non-commercial and thus not covered by the trademark laws, the corporations demanded that the district court enter a preliminary injunction barring any use of their names on her site.

Virga contacted Public Citizen, which in turn contacted lawyers at two prominent Tennessee law firms. In early December, Virga moved to dismiss the lawsuit because it violated her free speech rights and asked that the preliminary injunction be denied. In addition, she asked for an injunction labeling Terminix a "nuisance litigant" and requiring it to provide special justifications before suing her again in the future. She argued that the trademark claim was meritless, that it violated her free speech rights, and that it should have been included in the first suit Terminix brought against her. She also objected to the fact that she had been sued in Tennessee instead of her home state of California.

More recently, Virga asked the district court to stay any discovery against her while the court decided whether the lawsuit should be dismissed. The court granted that motion at the end of February. This week, Terminix withdrew the case.

"Although Carla Virga is pleased that the lawsuit has been withdrawn, Terminix s legal harassment has caused her considerable anguish, not to speak of costing a substantial amount of time and expenses," Levy said. "She will be reviewing her options about how to obtain redress for those wrongs, not to speak of teaching Terminix, and companies like it, the lesson that such lawsuits are not an acceptable way to respond to criticism."

These options include seeking attorneys fees and filing suit for malicious prosecution and abuse of process in California, Levy said.

Levy credited the victory in part to the substantial media attention that Terminix s lawsuit attracted, which in turn led to a number of complaints on investor bulletin boards about the lawsuit. A recent court filing from Terminix complained bitterly about the adverse publicity that the lawsuit had received and about the unexpectedly strong legal defense that Virga had been able to mount.

The Tennessee lawyers who volunteered their services to help Virga were Lucian Pera and Brian Faughnan of Armstrong Allen in Memphis, and Thor Urness, a trademark specialist from Boult, Cummings, Conners and Berry in Nashville. The First Amendment Project in Oakland, Calif., also played a key role in locating counsel in Tennessee. Virga received substantial pro bono assistance from her Internet experts, Charlene Cunniffe, an Internet specialist at Boult Cummings, and Danny Sullivan, a leading international authority on search engines.

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