Matrixx Initiatives, Inc. v. Doe

Among the anonymous posters on the two message boards were those using the aliases “veritasconari" and “gunnallenlies.” Veritasconari posted disparaging statements about Matrixx on the Yahoo! Finance message board between May and October 2003. In February 2004, Gunnallenlies began posting similar statements on the same message board. Matrixx served subpoenas on Yahoo! for information leading to the identification of the two posters, and Yahoo! complied. Both posters, however, had used identity-obfuscation software that enabled them to avoid being identified and subpoenaed.

Finally, on one occasion Gunnallenlies neglected to activate the screening service before posting on the Yahoo! Finance message board. Using the information provided by Yahoo!, Matrixx was able to trace Gunnallenlies to Barbary Coast, a hedge fund managed by Worthington. Worthington was deposed in San Francisco, but he refused to answer any questions about the identity of Veritasconari or Gunnallenlies, including whether he himself was Veritasconari or Gunnallenlies. He did admit knowing one of the named defendants in the case, Floyd Schneider, as both had once been defendants in an unrelated California lawsuit.^[1] He also admitted being a paying subscriber to the Eyeshade Report, to which Veritasconari had referred for support in denigrating Matrixx.^[2]

On February 11, 2005, Matrixx moved in Santa Clara County to compel Worthington’s deposition answers. In opposition, appellants contended that the motion could not withstand the heightened scrutiny necessary to overcome the posters’ First Amendment right to speak anonymously on the Internet. Appellants specifically argued that (1) the complaint was fatally deficient by failing to name Veritasconari and Gunnallenlies as defendants and (2) Matrixx was unlikely to prevail on the underlying defamation claim. After considering the written and oral arguments of the parties, however, the trial court granted Matrixx’s motion.

Discussion

Appellants renew the arguments they presented below. They maintain that Gunnallenlies and Veritasconari have a fundamental First Amendment right to speak anonymously, which cannot be overcome absent a “valid” cause of

action. In this case, they argue, Matrixx had failed to make a prima facie showing that the targeted postings were defamatory. Appellants also point out that Matrixx did not specify that Veritasconari was a Doe defendant or even mention Gunnallenlies in the complaint.^[3]

In response, Matrixx raises a new argument; that appellants lack standing to assert the rights of Gunnallenlies and Veritasconari as a basis for resisting discovery. Matrixx contends that appellants are unable to satisfy the prerequisites for asserting the constitutional rights of another.

Although Matrixx did not raise this issue below, “the issue of standing is so fundamental that it need not even be raised below—let alone decided—as a prerequisite to our consideration.” (Payne v. Anaheim Memorial Medical Center, Inc. (2005) 130 Cal.App.4th 729 , 745 [ 30 Cal.Rptr.3d 230 ]; see also Marshall v. Pasadena Unified School Dist. (2004) 119 Cal.App.4th 1241 , 1251 [ 15 Cal.Rptr.3d 344 ] [lack of standing not waived by failure to raise it in the trial court but may be raised at any point in the proceedings]; Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432 , 438 [ 261 Cal.Rptr. 574 , 777 P.2d 610 ] [“contentions based on a lack of standing involve jurisdictional challenges and may be raised at any time in the proceeding”].) Moreover, appellants have had the opportunity to address the question in their reply brief and at oral argument.

Neither party, however, has submitted adequate authority or analysis on this fundamental question. Both cite Powers v. Ohio (1991) 499 U.S. 400 [ 113 L.Ed.2d 411 , 111 S.Ct. 1364 ], which offered an exception to the general rule that in seeking relief litigants must assert their own legal rights rather than rely on the rights or interests of third parties. (Id. at p. 410.) The court limited the exception to circumstances in which three criteria are met: (1) the litigant suffers a distinct and palpable injury in fact, thus giving him or her a concrete interest in the outcome of the dispute; (2) the litigant has a close relationship to the third party such that the two share a common interest; and (3) there is some hindrance to the third party’s ability to protect his or her own interests. (Id. at p. 411; Lujan v. Defenders of Wildlife (1992) 504 U.S. 555 , 559-562 [ 119 L.Ed.2d 351 , 112 S.Ct. 2130 ]; Allen v. Wright (1984) 468 U.S. 737 , 751 [ 82 L.Ed.2d 556 , 104 S.Ct. 3315 ].) The first criterion is derived from the “case or controversy” requirement of article HI of the United States Constitution,

which is not at issue here.^[4] The second and third are “prudential” considerations that are invoked in the exercise of judicial restraint. (Elk Grove Unified School Dist. v. Newdow (2004) 542 U.S. 1 , 11-12 [ 159 L.Ed.2d 98 , 124 S.Ct. 2301 ].) “[P]rudential standing encompasses ‘the general prohibition on a litigant’s raising another person’s legal rights, the rule barring adjudication of generalized grievances more appropriately addressed in the representative branches, and the requirement that a plaintiff’s complaint fall within the zone of interests protected by the law invoked.’ ” (Id. at p. 12.) “The prudential limitations add to the constitutional minima a healthy concern that if the claim is brought by someone other than one at whom the constitutional protection is aimed, the claim not be an abstract, generalized grievance that the courts are neither well equipped nor well advised to adjudicate.” (Secretary of State of Md. v. J. H. Munson Co., Inc. (1984) 467 U.S. 947 , 956, fn. 5 [ 81 L.Ed.2d 786 , 104 S.Ct. 2839 ].) “Without such limitations—closely related to Art. Ill concerns but essentially matters of judicial self-governance—the courts would be called upon to decide abstract questions of wide public significance even though other governmental institutions may be more competent to address the questions and even though judicial intervention may be unnecessary to protect individual rights.” (Warth v. Seldin (1975) 422 U.S. 490 , 500 [ 45 L.Ed.2d 343 , 95 S.Ct. 2197 ].)

“These principles rest on more than the fussiness of judges. They reflect the conviction that under our constitutional system courts are not roving commissions assigned to pass judgment on the validity of the Nation’s laws. [Citation.] Constitutional judgments ... are justified only out of the necessity of adjudicating rights in particular cases between the litigants brought before the Court.” (Broadrick v. Oklahoma (1973) 413 U.S. 601 , 610-611 [ 37 L.Ed.2d 830 , 93 S.Ct. 2908 ].)

The United States Supreme Court has acknowledged that it has been “quite forgiving with these criteria in certain circumstances”—in particular, in First Amendment attacks on overly broad statutes. (Kowalski v. Tesmer (2004) 543 U.S. 125 , 130 [ 160 L.Ed.2d 519 , 125 S.Ct 564 , 567].) In such cases litigants “are permitted to challenge a statute not because their own rights of free expression are violated, but because of a judicial prediction or assumption that the statute’s very existence may cause others not before the court to refrain from constitutionally protected speech or expression.” (Broadrick v. Oklahoma, supra, 413 U.S. at p. 612.) “Even where a First

according to appellants’ theory, these individuals were never actually accused of defamation in Matrixx’s complaint.^[5]

The closest analogous circumstances we have found are those described in In re Subpoena Duces Tecum to America Online, Inc. (Jan. 31, 2000, No. 40570) 52 Va.Cir. 26 [ 2000 WL 1210372 ] (AOL) (revd. on other grounds America Online, Inc. v. Anonymous Publicly Traded Co. (2001) 261 Va. 350 [ 542 S.E.2d 377 ]) and In re Verizon Internet Services, Inc. (D.D.C. 2003) 257 F.Supp.2d 244 (Verizon) (revd. on another ground Recording Industry of America v. Verizon Internet (D.C. Cir 2003) 351 F.3d 1229 , 1239). In AOL, the plaintiff sought to discover the identities of an ISP’s subscribers so that it could properly name them in its Indiana lawsuit. The federal district court allowed America Online, Inc. (AOL) to assert the First Amendment rights of the John Doe defendants, because compelling disclosure would harm AOL as well as those it was trying to protect. “If AOL did not uphold the confidentiality of its subscribers, as it has contracted to do, absent extraordinary circumstances . . . one could reasonably predict that AOL subscribers would look to AOL’s competitors for anonymity. As such, the subpoena duces tecum at issue potentially could have an oppressive effect on AOL.” (AOL, supra, 52 Va.Cir. at p. 32.)

In Verizon, another ISP sought to quash a subpoena issued by the Recording Industry Association of America under the Digital Millennium Copyright Act of 1998 ( 17 U.S.C. § 512 (h)) (DMCA). The district court ruled that Verizon had standing to challenge the DMCA on behalf of its subscribers. In addition to society’s concern about the chilling of Internet users’ speech, the court noted that Verizon itself had “a vested interest in vigorously protecting its subscribers’ First Amendment rights, because a failure to do so could affect Verizon’s ability to maintain and broaden its client base.”^[6] (Verizon, supra, 257 F.Supp.2d at p. 258.)

In both the AOL and Verizon cases, the challenge to the subpoena was made by an entity with a sufficiently close relationship to the anonymous user that judicial consideration was warranted. (See also NAACP v. Alabama (1958) 357 U.S. 449 , 458-460 [ 2 L.Ed.2d 1488 , 78 S.Ct. 1163 ] [association had sufficient relationship with its nonparty members to assert their constitutional