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SCHIFF HARDIN LLP JEFFREY R. WILLIAMS (Cal. Bar No. 84156) [email protected] ALEX P. CATALONA (Cal. Bar No. 200901) Ac

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SCHIFF HARDIN LLP JEFFREY R. WILLIAMS (Cal. Bar No. 84156) Jrwilliams@Schiffhardin.Com ALEX P. CATALONA (Cal. Bar No. 200901) Ac Case3:09-mc-80275-SI Document14 Filed12/04/09 Page1 of 28 1 SCHIFF HARDIN LLP JEFFREY R. WILLIAMS (Cal. Bar No. 84156) 2 [email protected] ALEX P. CATALONA (Cal. Bar No. 200901) 3 [email protected] One Market, Spear Street Tower, 32nd Floor 4 San Francisco, CA 94105 Telephone: (415) 901-8700 5 Facsimile: (415) 901-8701 6 Attorneys for Plaintiff USA TECHNOLOGIES, INC. 7 8 UNITED STATES DISTRICT COURT 9 NORTHERN DISTRICT 10 SAN FRANCISCO DIVISION 11 USA TECHNOLOGIES, INC., Case No. CV 09-80 275 MISC (SI) 12 Plaintiff-Respondent, USA TECHNOLOGIES INC.’S 13 v. OPPOSITION TO DEFENDANT JOHN DOE, A.K.A. 14 JOHN DOE, a.k.a., “STOKKLERK,” STOKKLERK’S MOTION TO et al., 15 QUASH THE SUBPOENA TO Defendant-Movant. YAHOO! INC. SEEKING 16 IDENTITY INFORMATION 17 Date: December 18, 2009 18 Time: 9:00 a.m. Courtroom: 10, 19th Floor 19 Judge: Hon. Susan Illston 20 21 22 23 24 25 26 27 28 SCHIFF HARDIN LLP ATTORNEYS AT LAW SAN FRANCISCO USA TECHNOLOGIES’ OPPOSITION TO JOHN DOE, aka STOKKLERK’S MOT. TO QUASH-CV 09-80 275 MISC (SI) Case3:09-mc-80275-SI Document14 Filed12/04/09 Page2 of 28 1 TABLE OF CONTENTS 2 Page 3 I. SUMMARY OF OPPOSITION....................................................................1 4 II. STATEMENT OF FACTS............................................................................2 5 III. PROCEDURAL HISTORY........................................................................11 IV. ARGUMENT ..............................................................................................12 6 A. The Constitutional Framework. ........................................................12 7 1. The First Amendment Does Not Protect Defamation. ...........12 8 2. Courts Must Balance A Defamation Plaintiff’s Right To 9 Redress Against The Defendant’s Interest In Posting Anonymously Online..............................................................13 10 B. USAT Has Proven A Prima Facie Case Of Actionable 11 Defamation Under Pennsylvania Law. .............................................14 12 1. Pennsylvania Defamation Law Governs. ...............................14 13 2. Stokklerk’s Statements Constitute 14 Defamation Per Se..................................................................15 15 3. It Is Stokklerk’s Burden To Establish 16 The Defense Of “Truth.” ........................................................19 17 4. Accusing USAT Of Operating A Ponzi Scheme Is Actionable Defamation At Common Law..........................20 18 19 5. Stokklerk Does Not Escape Liability By Claiming His Defamatory Postings Are “Opinion.” ..............21 20 6. USAT’s Complaint Meets The Pleading Requirements Of 21 The Federal Rules Of Civil Procedure. .................................22 22 V. CONCLUSION ...........................................................................................22 23 24 25 26 27 28 SCHIFF HARDIN LLP ATTORNEYS AT LAW i SAN FRANCISCO USA TECHNOLOGIES’ OPPOSITION TO JOHN DOE, aka STOKKLERK’S MOT. TO QUASH-CV 09-80 275 MISC (SI) Case3:09-mc-80275-SI Document14 Filed12/04/09 Page3 of 28 1 TABLE OF AUTHORITIES Page 2 CASES 3 Brinich v. Jencka 4 757 A.2d 388 (Pa. 2000) ............................................................................15 Chaker v. Crogan 5 428 F.3d 1215 (9th Cir. 2005).....................................................................12 6 Centennial School Dist. V. Independence Blue Cross 7 885 F.Supp. 683 (E.D.Pa. 1994) .................................................................12 Columbia Insurance Company v. Seescandy.com 8 185 F.R.D. 573 (N.D. Cal. 1999) ..........................................................12, 13 9 Cornell Companies, Inc. v. Borough of New Morgan 512 F.Supp.2d 238 (Ed. Pa. 2007) .................................................. 15-17, 19 10 Dendrite International, Inc. v. Doe 11 775 A.2d 756 (N.J. 2001)......................................................................13, 22 12 Digiorgio Fruit Corp. v. AFL-CIO 215 Cal. App. 2d 560 (Cal. App. 1963). .....................................................12 13 Fitzpatrick v. Milky Way Productions, Inc. 14 537 F.Supp. 168 (E. D. Pa. 1982) ..............................................................14 Green v. Minzer 15 692 A.2d 169 (Pa. Super. 1997)..................................................................12 16 Hanley v. Tribune Publishing Co. 527 F.2d 68 (9th Cir. 1975)..........................................................................14 17 Highfields Capital Management L.P. v. Doe 18 385 F. Supp.2d 969 (N.D. Cal. 2005) ........................................ 13-14, 22-23 19 In re Shur, Bkrtcy. 184 B.R. 640 (Bankr. E. D. N. Y. 1995).....................................................12 20 Levesque v. Kings County Lafayette Trust Company 21 293 F. Supp. 1010 (E.D.N.Y. 1968.)...........................................................20 22 Milkovich v. Lorain Journal Co. 497 U.S. 1 (1990) ........................................................................................21 23 Newsham v. Lockheed Missles & Space Co., Inc. 24 190 F.3d 963 (9th Cir. 1999).......................................................................14 Philadelphia Newspapers, Inc. v. Hepps, 25 475 U.S. 767 (1986) ....................................................................................20 26 Powers v. Ohio 499 U.S. 400 (U.S.Ohio, 1991)...................................................................18 27 28 SCHIFF HARDIN LLP ATTORNEYS AT LAW ii SAN FRANCISCO USA TECHNOLOGIES’ OPPOSITION TO JOHN DOE, aka STOKKLERK’S MOT. TO QUASH-CV 09-80 275 MISC (SI) Case3:09-mc-80275-SI Document14 Filed12/04/09 Page4 of 28 1 TABLE OF AUTHORITIES (Cont’d) Page 2 CASES 3 R.A.V. v. City of St. Paul 4 505 U.S. 377 (1992) ...................................................................................12 Roskos v. Sugarloaf Tp., 5 295 F.Supp.2d 480 (M.D.Pa. 2003) ...........................................................22 6 Simms v. Exeter Architectural Products Inc. 7 916 F. Supp. 432 (M.D. Pa. 1996) ..............................................................19 Synergy, Inc. v. Scott-Levin, Inc. 8 51 F.Supp.2d 570 (Ed. Pa. 1999) ..........................................................16, 17 Tucci v. Club Mediterranee, S.A. 9 89 Cal.App.4th 180 (Cal. App. 2001) ..........................................................14 10 Weinstein v. Bullick, 827 F.Supp. 1193 (E.D.Pa. 1993) ...............................................................19 11 12 STATUTES 13 42 Pa. C.S.A. § 8343..............................................................................................20 14 FED. R. CIV. P. 45................................................................................................12 15 FED. R. CIV. P. 26(F) ...........................................................................................11 Securities Exchange Act Of 1934, 15 U.S.C. § 78j(b)..........................................19 16 Securities Exchange Commission, 17 C.F.R. § 240.10b-5 ...................................19 17 18 OTHER AUTHORITY 19 Restatement (2nd) Torts, § 573 (1977) .............................................................15, 16 20 Restatement (2nd) Torts, § 566 (1977) ...................................................................21 21 Black’s Law Dictionary 1278 (9th Ed. 2009.)..........................................................3 22 23 24 25 26 27 28 SCHIFF HARDIN LLP ATTORNEYS AT LAW iii SAN FRANCISCO USA TECHNOLOGIES’ OPPOSITION TO JOHN DOE, aka STOKKLERK’S MOT. TO QUASH-CV 09-80 275 MISC (SI) Case3:09-mc-80275-SI Document14 Filed12/04/09 Page5 of 28 1 TO THE HONORABLE JUDGE OF SAID COURT: 2 COMES NOW USA Technologies, Inc., (“USAT”), Plaintiff in the above- 3 entitled action, and opposes the Motion to Quash The Subpoena To Yahoo! Inc. 4 (“Yahoo!”) Seeking Identity Information filed by Defendant John Doe, a.k.a. 5 Stokklerk (“Stokklerk”), and in support states as follows: 6 I. SUMMARY OF OPPOSITION 7 Contrary to Stokklerk’s argument, USAT does not seek to deny anonymous 8 speakers their First Amendment rights. (In fact, Stokklerk continues to post 9 messages on Yahoo!’s Message Board about USAT and the Motion To Quash.)1 10 But there is no absolute right to post false and defamatory statements about an 11 individual or company, and hide behind the veil of a fictitious name. Stokklerk 12 attempts to portray his postings as legitimate criticism of USAT’s “profitability” 13 and “generous executive compensation.” Stokklerk’s own words betray his true 14 aim, which is to damage USAT’s reputation and lower its stock price by accusing it 15 of embezzlement, investor fraud, and operating a Ponzi scheme in 23 separate 16 anonymous posts. The postings are especially egregious since at the time the 17 postings were made, there was extensive publicity concerning the Bernard Madoff 18 Ponzi scheme. While Stokklerk maintains his anonymity should be protected, he 19 has asserted no basis to believe that he could suffer prejudice by revealing his 20 identity. This is not a case where revealing an anonymous poster’s identity could 21 cause embarrassment or lead to the disclosure of highly sensitive information. Nor 22 is this a case of a regrettable statement made in the heat of the moment. Rather, 23 Stokklerk has engaged in a deliberate, systematic and ongoing effort to defame 24 USAT. 25 USAT must learn Stokklerk’s identity to proceed with its defamation case 26 pending before the United States District Court for the Eastern District of 27 1 28 See Declaration of Alex P. Catalona (“Catalona Dec.”),
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