Online Security, a global provider of computer forensics and information technology risk mitigation since 1997   Original Source:    http://www.siliconvalley.com/mld/siliconvalley/7263445.htm H&R Block sues anonymous online critic Author:  By DAN MARGOLIES Joining a growing number of public companies aggrieved by online postings, H&R Block Inc. has filed a defamation suit against an Internet poster it suspects of being an employee. Because his or her identity is unknown to Block, the company has sued “John Doe, a/k/a ‘enronjunior,' ” the defendant's pseudonym or screen name. The lawsuit, filed in federal court in Kansas City, alleges that the defendant has disclosed confidential and misleading information about Block on Yahoo's message board. Specifically, the lawsuit alleges that on Sept. 8, the defendant posted a message saying that Block had failed to tell investors about a pending lawsuit and a company official's alleged statement to Block's board of directors that the loss — presumably from the litigation — would be between $100 million and $300 million. Two days later, according to the lawsuit, the defendant posted another message saying that the information wouldn't be available “until the company decides to comply with the law and make it public.” Calling the comments “false and inaccurate,” the lawsuit contends the messages were defamatory, violated company employment policies barring the disclosure of confidential and proprietary information, and violated federal securities laws. The four-count lawsuit seeks unspecified damages for defamation, breach of employee policy, breach of fiduciary duty and securities fraud. It also asks for an order barring the defendant from disclosing proprietary, confidential or false information about Block. “Certainly anyone has the right to voice their opinions in a variety of forums,” said Block spokeswoman Linda McDougall. “But when you cross the line from opinion and you're stating something as fact that is not fact, you need to be held responsible for what you say.” The defendant's comments don't appear to have had a material effect on Block stock. Shares in the company's stock closed at $42.20 on Sept. 8, dropped to $41.79 the next day, fell to $41.13 on Sept. 10, then dropped to $41.10 on Sept. 11. Since then, the stock has trended upward, closing Thursday at $49.19, unchanged from the day before and one cent off the shares' 52-week high. The postings were an apparent reference to a then-pending lawsuit against Block by a former Block franchisee in Little Rock, Ark. The case went to trial last month and resulted in $4.1 million in damages being awarded to the plaintiff, JBW Limited Partnership. The case was the first of about a dozen similar actions awaiting trial. All of them were filed by ex-Block franchisees and allege that Block undervalued their businesses after opting not to renew their franchises. At issue is a contract provision requiring Block to compensate franchisees with “fair and equitable payments” if their franchises are not renewed. McDougall said Block respected the privacy and anonymity of Internet posters, “but they have to take responsibility for what is posted.” In this case, she said, the information was improperly disclosed and was inaccurate. “So to stop it,” McDougall said, “we need to find out who's doing it” by subpoenaing Yahoo. McDougall said she didn't know if Yahoo had been contacted yet. The lawsuit says that, despite “diligent investigation,” Block has been unable to uncover the defendant's identity. This isn't the first time that Block has taken legal action to flush out the identities of anonymous Internet posters. In 2000, the company subpoenaed Yahoo for the names of nine individuals who had posted confidential financial information during tax season, typically Block's most profitable quarter. McDougall said Yahoo provided the information. Citing Block's privacy policy, she declined to say whether the nine were employees and, if so, what happened to them. Lawsuits aimed at forcing Internet service providers to provide the names of anonymous Internet users have become increasingly common in recent years. In July, Schlotzsky's Inc., an Austin, Texas-based deli chain, sued several pseudonymous Internet users, claiming their comments had scared away potential franchisees and cost the company millions of dollars. And in a case similar to the one filed by Block, earlier this year Metris Cos., a credit card company based in Minnetonka, Minn. sued two former employees, claiming they posted defamatory and misleading messages about the company and its then-recently ousted chief executive. In many instances, courts have sided with the Internet users, citing their free speech rights. But in a case handed down in February, a federal court in California ruled that a defamation and unfair competition lawsuit against a poster who turned out to be a business competitor of the plaintiff, MCSi Inc., could go forward. Although it recognized that the message board in question was a “public forum,” the court held that the disparaging postings were “commercial” speech and not entitled to the same level of First Amendment protection as “political” speech. “While most cases say people on the Internet are just offering their opinion, these message boards can be manipulated,” said Los Angeles lawyer Ian C. Ballon, who represented MCSi and has written a three-volume treatise called “E-Commerce and Internet Law.” “You can't paint with a broad brush and say that just because it's the Internet, it's a liability-free zone.”