Global Direct Sales, LLC, its principals Ryan Hill and Christopher Russell, and the Penobscot Indian Nation sued Aaron Krowne, Krista Railey, Implode-Explode Heavy Industries, Inc. (IEHI), Krowne Concepts, Inc. (KCI), and others after Krowne's mortgage watchdog website, The Mortgage Lender Implode-O-Meter, published an article written by Railey that criticized the Grant America Program. The Grant America Program is a seller-financed down payment assistance program for low- to moderate-income homebuyers, operated under an agreement between Global Direct Sales and the Penobscot Indian Nation.

The Implode-O-Meter site hosts Railey's "FHA Mortgage Whistleblower" column, where the article appeared. In her article, Railey allegedly made a number of false and defamatory statements, including that the Grant America Program was a "scam," and that Russell and Hill had treated another charity they founded "like their own personal piggy bank." Cmplt.¶ 37. In response to an angry comment by Russell, Railey conferred with Krowne and other website editors, who edited the article to "tone down" the commentary and removed references to the word "scam" from the article before it was republished on Railey's blog (apparently the original version that appeared online was a draft published inadvertantly). The plaintiffs filed suit nonetheless. Railey, Krowne, and the other defendants maintained that the article was accurate and based on publicly available information.

The plaintiffs filed a motion for a temporary restraining order and preliminary injunction on September 26, 2008. The defendants filed a response on October 7, arguing that the requested injunctive relief would constitute an unconstitutional prior restraint on speech, and that the allegedly defamatory statements were not actionable. 

Update:

The court subsequently dismissed three defendants-Aaron Krowne, Justin Owings, and Lorena Leggett-for lack of personal jurisdiction, and a fourth defendant, Streamline Marketing, Inc., without prejudice.

On November 11, 2009, the remaining defendants (IEHI and KCI) filed a special motion to dismiss under Maryland's anti-SLAPP law, arguing that the plaintiffs filed the suit in bad faith because of defendants' exercise of their First Amendment rights and rights granted by the Maryland Declaration of Rights.

Plaintiffs responded on December 7, 2009, contending that Maryland's anti-SLAPP law does not apply in federal court because it is predominantly procedural and conflicts with the Federal Rules of Civil Procedure. They also argued that the statute was inapplicable because it only applies to communications "regarding any matter within the authority of a government body," and "multiple" statements in the article at issue did not involve such matters. Plaintiffs further claimed that the complaint was filed in good faith, that the article was not entitled to First Amendment protection because it "contains both false statements of fact and unsupported opinion that implies defamatory facts," and that the article was prompted by constitutional malice in "retaliation for the plaintiffs' refusal to advertise on [defendants'] website." Throughout the brief, the plaintiffs relied heavily on a declaration provided by the author of the article at issue, Railey, which "admit[ted] that ‘there are significant problems with the final published article" and that the "article contains and implies false statements of fact and is misleading in a material manner." 

The defendants filed a reply in support of the special motion to dismiss on January 26, 2010. They argued that the Maryland's Anti-SLAPP statute was applicable, because it is not inconsistent with federal rules. Defendants also claimed that the article "addressed an issue within the authority of a government body, . . . Plaintiffs cannot satisfy their burden for their defamation claim, and . . . this suit was brought in bad faith to drive Defendants out of business and thereby silence them." Defendants contrasted Railey's declaration for the plaintiffs with a "much earlier declaration," in which she stated "I stand behind all of the statements I have made in my article about the Plaintiffs and believe each and every one of them to be based in truth and supported by my research."

On July 12, 2010, the court denied the defendants motion to dismiss pursuant to Maryland's anti-SLAPP statute. The court applied the statute because it "is limited in its scope and appears not to conflict with the Federal Rules of Civil Procedure." However, the court concluded that there were genuine issues of material fact as to whether "the suit was brought in bad faith," the article "was regarding any matter within the authority of a government body," and "whether Defendants maliciously published the article."

The attorneys for IEHI and KCI subsequently filed motions to withdraw from the case, and, on May 31, 2011, the court granted them. In doing so, the court advised the defendants that, as corporate entities, they could not move forward without representation. The court subsequently defaulted both entities for failure to answer the complaint through counsel. Plaintiffs then filed an unopposed motion for default judgment as to liability against the defaulted defendants, for summary judgment, and for a permanent injunction. The court denied that motion on April 9, 2012, finding that, although the plaintiffs' had properly pled the elements of defamation, a final judgment could not be entered while the claims against defendant Railey were still pending.

On July 6, 2012, IEHI and KCI, represented by new attorneys, filed a motion to vacate the entry of default. The court granted the motion, finding that the defendants' had established "the viability of four defenses to Plaintiffs' defamation claims"-they "demonstrated, with ample factual support,: (1) Plaintiffs . . . are government entities, and as such, under the First Amendment cannot maintain actions for defamation or libel; (2) Plaintiffs cannot meet their burden to prove falsity . . .; (3) the author, Railey, was not an agent of the IEHI and Krowne Concepts . . .; and (4) Plaintiffs do not allege that they suffered any harm as a result of Defendants' statements." The court decided that the defendants' yearlong delay in moving to vacate the default was not dispositive, as it did not prejudice the plaintiffs.

On July 1, 2013, the defendants moved for summary judgment. They elaborated on the claims included in their motion to vacate the judgment and raised, for the first time, a defense under Section 230 of the Communications Decency Act, claiming that the defendants "did little more than provide a canvas upon which third parties placed material." Plaintiffs responded to the motion by arguing that Section 230 was inapplicable. According to plaintiffs, IEHI "was responsible for both creating and developing" the article as a "joint project" with Railey. Relying on Fair Housing Council of San Fernando Valley v. Roommates.com, LLC, 521 F.3d 1157 (9th Cir. 2008), the plaintiffs argued that a website is a content provider "even if it did not ‘create' the content as long as it ‘materially contributes to the illegal conduct.'" Plaintiffs argued that IEHI materially contributed to the article because IEHI editors performed research for the article, edited the article before it was published, exchanged drafts, and "had the last say on what was published."

The district court dismissed the case on summary judgment on Sept. 18, 2013, holding that even if the plaintiffs' allegations were true, Section 230 "immunize[d] IEHI from this defamation action." The court noted that "determining what makes a party responsible for the ‘development' of content under Section 230(f)(3) is unclear," but that, under Roommates.com, 521 F.3d at 1163, "one is responsible for the ‘development' of information when he engages in an act beyond the normal functions of a publisher (such as deciding to publish, withdraw or modify third-party content) that changes the meaning and purpose of the content." On the other hand, the court stated, if an internet service provider "only passively displays content that is created entirely by third parties, then it is only a service provider with respect to that content."

The court found that, in this case, "[h]olding IEHI liable for mere control of the website on which allegedly defamatory content was published is precisely the type of conduct that falls squarely within the protections of the CDA." The court held that even if plaintiffs' assertions that "Railey received direct input from Krowne, that [an editor] performed research and that drafts were exchanged, and IEHI had the last say on what was published" were true, these actions merely amounted to "monitoring and publication of content on its network - ‘actions quintessentially related to a publisher's role.'" "[E]ven assuming Krowne edited or altered the content of the allegedly defamatory article," the court noted, "IEHI would still be immune." The court therefore concluded that Section 230 barred the plaintiffs' defamation claims.

By party agreement, the complaint was withdrawn as against KCI, and Penobscot Indian Nation was removed as a Plaintiff. The claims against Railey appear to have been settled outside of court. According to the docket, the case was terminated on September 25, 2013.

In December 2002, Roger Grace was the winning bidder on several auctions of Hollywood memorabilia being sold by Tim Neeley on the popular action site, eBay.  After Grace left negative feedback about the transactions, Neeley posted a negative comment about Grace in which he wrote, according to court filings, “Complaint: SHOULD BE BANNED FROM EBAY!!!! DISHONEST ALL THE WAY!!!!” Grace contacted eBay and stated that the seller’s comments were defamatory, but eBay did not remove them.

On January 21, 2003, Grace sued eBay, Inc. and Neeley, alleging counts for libel against both defendant and for violation of unfair competition law against eBay.  Grace withdrew the second count after eBay removed the challenged comments from its website.  Grace appears to have been unable to personally serve Neeley, and the court dismissed the suit against him on July 3, 2003.  

On March 28, 2003, eBay filed a motion to dismiss on the basis that it was immune from liability under section 230 of the Communications Decency Act (CDA 230) and because its Terms of Use released it from any liability for plaintiff's claims.  The Superior Court granted eBay's motion on April 28, 2003, finding that it was immune from liability under CDA 230.

A complicated series of appeals ensued.  In summary, on July 22, 2004, the California Court of Appeals affirmed the dismissal.  The appellate court held, however, the CDA 230 does not protect information distributors who know or have reason to know of defamatory material on their site, but nevertheless, eBay’s contractual release absolved it of liability for Grace's claims. Grace v. eBay, Inc., 16 Cal. Rptr. 3d 192 (Cal. App. Ct. 2004). 

On October 13, 2004, the California Supreme Court granted a hearing on the case and vacated the appeals court opinion, 99 P.3d 2 (Cal. Oct. 13, 2004), but then dismissed the hearing and remanded the case back to the lower court.  101 P.3d 509 (Cal. Dec. 1, 2004).  As a result, the lower court's dismissal stands. 

Stephen Graham Hogge, operator of the blog, Hog on Ice, was sued in California by former Miami School of Law classmate Fatima dos Santos Fahmy over statements he made about her on his blog, which he describes as a humorist's view of "Guns, God, Food, Beer, Tools, Politics, and Whining."

According to Fahmy's complaint, which raises claims for Defamation, Intentional and Negligent Infliction of Emotional Distress, and False Light Invasion of Privacy, Hogge and three unknown defendants "published numerous false, defamatory and grossly injurious statements about her" on Hogge's blog, including calling her a deadbeat, maligning her work ethic, and falsely claiming that she was Hogge's former girlfriend.

Both parties represented themselves in the case. In March 2008, Hogge, a resident of Florida, filed a motion to dismiss based on lack of personal jurisdiction and insuffiency of service of process. The court initially denied the motion, but on Hogge's motion for reconsideration dismissed the case on October 14, 2008, finding that it lacked both general and specific jurisdiction over him.

Roy Holmgren sued the Murrietta Opinion and About Murrieta blogs, as well anonymous operators and/or commenters to these blogs, for defamation in California state court in March 2008. The complaint alleged that the defendants published false statements about Holmgren on the two blogs, including statements that he was a stalker, that he was married to an illegal alien, and that he committed crimes that destroyed property. Cmplt. ¶ 9.

The case did not move forward for several months because Holmgren did not know the identities of the blog operators and commenters. Blogspot, the hosting service for the two blogs, refused to cooperate with Holmgren's request for identifying information.

After some investigation, Holmgren amended the complaint in Sepember 2008, naming Jeffrey Kleiner as the operator of the Murrieta Opinion blog. According to an affidavit, Holmgren mailed the amended complaint to Kleiner, but he has not served or identified any other defendants.

Update:

12/15/2008 - Court issued an Order to Show Cause to Holmgren requiring him to show why sanctions of $150.00 on the 1st Amended Complaint should not be ordered for failure to file proof of service of summons.

Case is ongoing: A case management hearing is scheduled for 8/07/2009.

According to a comment posted below, the plaintiff voluntarily dismissed the case after being unable to locate the defendant.

In January 1999, Sovereign Partners Limited Partnership, Dominion Capital Fund Limited, and Stephen M. Hicks, filed a defamation action alleging that they had been falsely accused of manipulating the stock of small public companies by engaging in short selling designed to drive the stock prices into a “death spiral.” The defendants include Restaurant Teams International, Inc., its chief financial officer Curtis A. Swanson, and its chief executive officer Stanley L. Swanson, who published a press release containing the purportedly defamatory statements. The defendants also include ConSyGen, Inc. and its former chief executive officer Thomas Dreaper, who allegedly disseminated a similar press release. Finally, the plaintiffs sued four persons, including Francis Worst, who they alleged posted defamatory statements on Internet financial bulletin boards.

After a number of defendants settled and issued public apologies recanting the allegations of illegal conduct on the part of the plaintiffs, Francis Worst filed a motion to dismiss and sought sanctions against the plaintiffs for filing the lawsuit against him.

According to Worst's attorney, Eric Turkewitz, "we explained to their lawyers that the message was already public, that the reprinting was certainly not done with any kind of malice, that Mr. Worst was unaware of any defamatory content, that he had not added any original content, and that injury, if any, was inadvertent and not attributable to Mr. Worst."

On January 12, 2001, the court allowed the plaintiffs to withdraw their lawsuit in the face of Worst's motion to dismiss and denied his request for sanctions.

Investment management firm Rocker Management LLC filed a defamation suit against 20 anonymous posters who criticized Rocker Management and employee Marc Cohodoes on Yahoo! message boards.  According to court filings, the posts accused Cohodoes of threatening stock analysts, lying about stock information, and being under investigation by the SEC.  Rocker Management filed suit against the posters in New Jersey federal court, bringing claims of business libel and unlawful restraint of trade.

Rocker Management filed a subpoena against Yahoo! in California federal court seeking the identities of the anonymous posters.  One of the posters, known as "harry3866," filed a motion to quash the subpoena on April 4, 2003.  Harry3866 argued that Rocker Management could not show probable cause that he had defamed the company and further that his First Amendment right to speak anonymously required that the subpoena be quashed.

On May 29, 2003, the California court granted harry3866's motion to quash the subpoena.  The court found that harry3866's statements probably were opinion, particularly given the critical climate in the Yahoo! message boards.  Further, the court reasoned that Rocker had not shown that the statements were sufficiently factual to qualify as libelous, particularly given that Rocker did not precisely delineate which statements it alleged to be libelous.  Thus, the court found that a reasonable viewer would not find any of the dispute statements to be defamatory.

The other Does filed motions to quash the subpoena shortly afterward.  According to the New Jersey and California courts' dockets for the case, Rocker Management voluntarily dismissed its complaint on July 15, 2003, before the court ruled on the motions.

Riad Hamad, founder of the Palestine Children's Welfare Fund (PCWF), filed a defamation suit against the editor and publisher of online publication FrontPage Magazine and several other defendants.  Hamad alleged that a FrontPage article accused Hamad and PCWF of funneling money to terrorists, called Hamad an anti-Semite, and otherwise disparaged him and his organization.

Hamad's original complaint brought approximately 15 legal claims against FrontPage editor David Horowitz and publisher Center for the Study of Popular Culture (CSPC) and asked for $80 million in damages.  Hamad subsequently amended his complaint five times, progressively adding more defendants and legal claims related to the FrontPage article and postings from other sites. These claims included business disparagement, tortious interference, intentional infliction of emotional distress, fraud, negligence, and trademark dilution, among others.

The district court dismissed all of Hamad's claims in three 2006 and 2007 orders. Each claim was dismissed in part because the one-year statute of limitations for defamation actions had run -- Hamad had filed suit in 2006, while the articles were published in 2003 and 2004.  In finding that the statute of limitations had passed, the court applied the single publication rule: it determined that the statue of limitations began running when each article was first published online.

In the three orders, the court also dismissed most of Hamad's claims on alternative grounds, such as lack of personal jurisdiction, failure to state a claim upon which relief could be granted, and immunity under CDA 230 (with respect to Dotster, Inc., a domain registrar).

In the second of the three orders, the court sanctioned Hamad for repeatedly amending his complaint without permission and for failing to heed a court warning that he would face sanctions if he did not voluntarily dismiss his complaint.  The court ordered him to pay $3,000 in sanctions.

Rather than voluntarily dismissing his suit following the sanctions, Hamad filed for default judgment as to some of the parties.  As a result, the third and final court order dismissed Hamad's remaining claims and ordered him to pay $9,000 in sanctions and more than $50,000 in defendants' fees and costs.  Hamad appealed.

The Fifth Circuit affirmed the district court's judgment, relying primarily on the statute of limitations.  The court also granted defendants' request for fees arising from Hamad's "frivolous" appeal, amounting to more than $30,000.

All told, Hamad was ordered to pay more than $92,000 in sanctions, fees, and costs.