07 January 2006

Sect's Slapp Suit Stopped (Updated)

A cult called the Gentle Wind Project brought a racketeering and trademark suit in federal court in Maine (and other state law claims, apparently defamation, tortious interference with advantageous relationships, intentional infliction of emotional distress, negligent infliction of emotional distress, and false light invasion of privacy) against two former members and a related entity, and a number of people who republished what the two former members stated that exposed some of the less savory aspects of the group, in an effort to shut them up. In other words, it is a classic strategic lawsuit against public participation (a SLAPP). They lost the last of their claims in federal court on January 3, 2006, after about a year and a half of pre-trial motion and discovery practice.

Skeptico posted an order of a federal magistrate of September 4, 2004, that dismissed the federal claims in case against two of the defendants (the former members) and the related entity, on the pleadings (claims against two other original defendants were dismissed voluntarily after the suit was filed). At that point, all federal claims in the case had been dismissed, but the state law claims have not been challenged on the face of the pleadings, and jurisdiction remained because the court had jurisdiction over the other four parties based on diversity of citizenship in the opinion of the magistrate, and the federal court can retain jurisdiction to consider claims related to those over which it has jurisdiction based upon this diversity in some cases. At that point, since state law claims against all parties remained in the case, it was not over. But, this order was from a very early stage in the lawsuit (a full answer to the charges had not yet been made at the time), so this, in and of itself, didn't mean much.

I had not paid much attention to the date of the pleading posted, assuming it was hot off the presses. But, that should have tipped me off that I didn't have the whole story.

The next big decision was on December 6, 2004 in the first really substantive decision made by the federal district judge supervising the magistrate who wrote the decision cited by Skeptico. The judge rightly calls it a convoluted case (it was in early December 2004 where it ideally would have been in June of 2004 given the way that the rules of procedure are supposed to work). This decision noted that the Gentle Winds Project had dismissed its claims against all of the parties but the two former members and their related entity, and one other individual and a related entity, voluntarily, some apparently by virtue of a settlement (it appears that each paid their own attorneys' fees, no money changed hands, and there were non-disparagement terms) and the remainder voluntarily without a settlement. It also notes that the Gentle Winds Project Amended their Complaint to change the charges that they were bringing, making moot the Motion To Dismiss the claims originally brought that the ruling sited first addressed.

On January 10, 2005, the magistrate then recommended that the trademark claims against the two former members and all federal claims against their entity, be dismissed on the merits and that the claims against two related defendants be dismissed for lack of jurisdiction. This recommendation was then adopted by the judge on February 16, 2005, after far more argument. The gist of the reasoning behind the dismissal of the racketeering claims against the entity was that the claims didn't say that the entity had done anything bad. The trademark claim was dismissed primarily because this was not a case where the former members were trying to use any Gentle Winds Project marks to sell a competing product (which notably is a broader ground than the "fair use" claim one would make in defending a copyright claim, any statement that doesn't involve selling a competing product is immune from a trademark suit under this rationale).

The really interesting part of the January 10, 2005 opinion was the analysis of personal jurisdiction issues. The magistrate held, and his recommendation was affirmed, that a website operator may not be sued in another state simply because he discusses or criticizes activities going on in that state, even if he is aware that he may have readers in that state and it may impact someone's reputation in that state, unless the website is in some respect specifically directed at the affairs of that state. (This is the opposite of the result that applies when a commercial publisher sells magazines to people in another state. which itself is one of the worst precedents outstanding in all of the law of jurisdiction.)

On March 7, 2005, about ten months after the suit was initially filed, an Answer and Counterclaims were filed by the two former members and their entity (something that ordinarily happens within a month of the suit being commenced, but was not in this case because Gentle Winds Project was busy dismissing parties and having some of their claims dismissed as frivilous even as alleged). The Counterclaims were for defamation, invasion of privacy and infliction of emotional distress. Gentle Winds Project replied in due course to the counterclaims.

Sometime prior to December, 2005, the entity related to the two former members was dismissed as a party and there was discovery. On January 3, 2006, the last remaining federal charge, a racketeering charge against the two former members, was dismissed by the judge prior to trial, and with the last federal claims dismissed, the state law claims and counterclaims were dismissed now that there was no longer a jurisidictional basis for the federal court to be in the case. The ruling basically held that a bunch of people with seperate websites who exchange information do not constitute an enterprise and hence cannot have a criminal enterprise within the meaning of the racketeering statute.

Thus, the federal case is over, the Gentle Wind Project won nothing. This dismissals are summarized here.

Whether a new lawsuit will be brought in state court remains to be seen. The principal defendants made a strategic decision to stick exclusively to contesting the federal claims (no doubt to limit the legal fees expended on the case), which was sufficient to kill the case in federal court, rather than mounting a fuller defense to all of the charges in motion practice, even though a similar approach could have been take towards the defamation, privacy, and emotional distress charges. The downside of not doing this, however, appears to be that it is harder to make the claim, in federal court, at least, that the entire suit was simply frivilous which would justify a full award of attorneys fees. Now, I'm not necessarily criticizing the strategic decision made, because attorneys fees awards are much easier to get in theory than in practice. But, it is a point worth considering.

A comment by one of the parties to the lawsuit at Skeptico's site got me on the track of the fuller and more accurate story. This is, of course, an all the gory details telling of the story, partially to clarify what had been quite a bit of confusion in the posts various people, including myself, had made. But, I've kept all of this here for the additional reason that it is a useful resource to fellow bloggers who might face similar suits about how these kinds of cases can proceed and what kinds of arguments win.

This case bears the classic elements of a modern SLAPP suit. Rather than simply bringing a defamation case, it throws in everything and the kitchen sink, with many of the claims primarily directed at criminal or business transactions with little or no resemblence to the facts of the case. The point isn't necessarily to win. The point is to punish the defendants by forcing them to incur legal fees in a manner that doesn't result in an attorneys' fee award against the people bringing the lawsuit. By this criteria, the Gentle Winds Project lawsuit was a success, and apparently they got some parties who had commented upon them to back off, and as a result may deteur further criticism against them by people afraid of a similar experience. This is why legislation to stop this kind of suit is still needed.


Anonymous said...

A few inaccuracies: 1) Federal Court has no jurisdiction over any of the Gentle Wind Project's lawsuit co-defendants, and all have now been dismissed. 2)Only two defendants were former members of GWP; other defendants had posted the ex-members' stories on their websites. 3) This important decision on RICO, and earlier on Lanham, another Federal claim, was by Senior District Judge Carter, not by a Magistrate Judge. 4) Full answers to all the charges have been filed; there have been months of discovery, etc. 5) GWP's initial claim was filed in May 2004; thus this is not an early step in the lawsuit. For a history of what has actually taken place, and an appreciation of the importance of this ruling, please go to Wind of Changes website, http://www.windofchanges.org, and view the actual documents and facts.

Andrew Oh-Willeke said...

I've updated the post to reflect the details at the windofchanges site.