Company's Lawsuits To Deter Critical Comments Backfire

WASHINGTON, D.C. -- Hollis-Eden Pharmaceuticals has paid $107,887 in
attorney fees and agreed to dismiss two cases against stockholders who
posted critical messages about the company on an Internet message
board.

In both cases, the trial court earlier had agreed with the critics,
who were both shareholders represented by the Public Citizen
Litigation Group, that the suits were improper SLAPPs (Strategic
Litigation Against Public Participation) — lawsuits intended to deter
them and others from exercising their First Amendment right to
criticize the company.

In the first case, filed in December 2000, Hollis-Eden, a drug
development company based in San Diego, sued 10 individuals, claiming
they had posted defamatory messages on a Yahoo! message board devoted
to discussion about the company. Public Citizen represented two of the
posters and asked the court to dismiss the complaint against them on
the ground that the suit was an unlawful attempt to chill the exercise
of their constitutional right to speak freely about the publicly held
company.

California's anti-SLAPP law is based on the recognition that the
lawful exercise of First Amendment rights is threatened by the
financial and emotional cost of defending against a frivolous lawsuit.
The law offers defendants a mechanism for seeking prompt dismissal of
meritless lawsuits that challenge speech about a public issue or
speech made in connection with an official proceeding.

In March 2000, the trial court agreed with Public Citizen that the
postings of the two shareholders concerned a matter of "public
interest" within the meaning of the anti-SLAPP statute and that the
statements were not defamatory. The court dismissed the case against
the two and awarded the defendants attorney fees and costs of
approximately $72,000. Hollis-Eden appealed. Both parties had filed
briefs and were awaiting a date for oral argument when they agreed to
settle the case.

Soon after the trial court dismissed the first case, Hollis-Eden again
sued one of the two original defendants, this time for a single
message he posted in March 2001. Public Citizen again invoked the
anti-SLAPP statute, and the court again dismissed the case.
Hollis-Eden's appeal and a motion for attorney fees in the trial court
were both pending when the parties agreed to a settlement.

Under the terms of the settlement, the two defendants accepted
$107,887 in attorney fees and costs in the two cases, and Hollis-Eden
agreed to dismiss both appeals. Both defendants retain their First
Amendment rights to speak about the company.

"Hollis-Eden tried for a full year to use the court system to
intimidate its critics into silence," said Allison Zieve, a Public
Citizen Litigation Group lawyer who represented the two individuals.
"Better late than never, the company seems to have realized that
frivolous lawsuits were not going to suppress criticism and, in fact,
were creating more ill-will for the company among its stockholders."

Public Citizen worked on the case with local counsel Charles A. Bird
of Luce, Forward, Hamilton & Scripps LLP, based in San Diego, Calif.

Not totally related, but interesting.

Several years ago a man in my town became upset with the local Dunkin' Donuts
and started a website dunkindonutssucks.com

Dunkin' Donits sued him and lost. They ended up coughing up a 5 figure sum to
buy the website from him so they could shut it down.



++++++++++
Phil DeMayo - always here for my fellow Stooge
When bidding online always sit on your helmet
Just say NO to counterfeits

Phil DeMayo wrote:
Not totally related, but interesting.

Several years ago a man in my town became upset with the local
Dunkin' Donuts and started a website dunkindonutssucks.com

Dunkin' Donits sued him and lost. They ended up coughing up a 5
figure sum to buy the website from him so they could shut it down.

Presented without comment:

The domain "acgsucks.com" is currently available.

--
Bob

"Ned Flanders" wrote in message
om...

In the first case, filed in December 2000, Hollis-Eden, a drug
development company based in San Diego, sued 10 individuals, claiming
they had posted defamatory messages on a Yahoo! message board devoted
to discussion about the company.

Isn't this where someone jumps in and says if the defendants had just
withdrawn their statements, and perhaps purchased some drugs from the
company, then it might have gone easier on them?
--
Zamboni

"Zamboni" wrote in message ...
"Ned Flanders" wrote in message
om...

In the first case, filed in December 2000, Hollis-Eden, a drug
development company based in San Diego, sued 10 individuals, claiming
they had posted defamatory messages on a Yahoo! message board devoted
to discussion about the company.

Isn't this where someone jumps in and says if the defendants had just
withdrawn their statements, and perhaps purchased some drugs from the
company, then it might have gone easier on them?

And I'm sure there damn good drugs--no major completes yet!

Cheers,

Ned