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Publicly Traded Company Drops Lawsuit Against Online Critic

June 16, 2009

Publicly Traded Company Drops Lawsuit Against Online Critic

Public Citizen Helps Protect Speaker’s Anonymity

WASHINGTON, D.C. – A publicly traded company’s lawsuit that attempted to identify anonymous critics on Yahoo!’s stock trading message board was an effort to scare critics away from speaking freely and was rightly dismissed at the request of the company by California’s Superior Court today.

Public Citizen and Electronic Frontier Foundation represented one of the anonymous critics and had filed a motion to quash the subpoena for his or her identify and a motion to strike the complaint under California’s anti-SLAPP statute.   

IA Global, Inc. (NYSE: IAO), a company that engages in a variety of activities including operating telemarketing call centers abroad, has not only dropped its defamation lawsuit against the anonymous critic known on Yahoo! message boards as “Stillworldly,” but also has agreed to pay Stillworldly for the costs of defending against the lawsuit and to pay some of Public Citizen’s attorney’s fees. As required in the agreement, the CEO of IA Global also issued a public statement that it would respect the First Amendment rights of anonymous message board posters.

“The company was performing poorly, and the message board posters said so. If public discussion of a company’s poor stock performance and debate about the reasons for that poor performance are grounds for a lawsuit, then Wall Street firms could be suing just about everyone,” said Margaret Kwoka, a Public Citizen attorney on the case. “But the truth is, public commentary on an issue of public interest is protected speech.”

As part of the settlement, Stillworldly stated that he or she did not intend to imply that IA Global’s executives broke any securities laws. In the same posting, the critic wrote, “[F]ree speech is a precious gift. It protects all of us when those with more money to pay lawyers than we have, try to intimidate us for speech they just don’t like.” 

READ Public Citizen’s motions.

READ the request for dismissal.