Jim Porter: Is former employee’s web rant protected as free speech? | SierraSun.com
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Jim Porter: Is former employee’s web rant protected as free speech?

TRUCKEE, Calif. – One of my pet peeves is anonymous Internet posting. It’s a whole new world out there. Everyone has an easy way to express their opinions, which reminds me of my favorite book title (of a friend’s – first and only – book): “Everyone’s Entitled to my Opinion.”

Free expression is a good thing, but it seems to me you should have the courage to use your name rather than hide behind a cloak of anonymity. Anonymous postings seem to license the grumps, kooks and righteous folks and those who get the facts about half right. At least that’s one jaded view from an old-schooler.

Craigslist ‘Rants and Raves’



Craigslist has a section called “Rants and Raves” which “provides a forum to anonymously discuss issues.”

Robert Rogers was a former employee of Summit Bank headquartered out of Oakland, California. Mr. Rogers was not fond of his former employer and posted dozens of derogatory comments in a two month period ending in July, 2009. Here are some gems:




“The b—h CEO that runs this Bank thinks that the Bank is her personel [sic] Bank to do with it as she pleases … Whats [sic] up at this problem Bank. The CEO provides a [sic] executive position to her worthless, lazy fat a– son Steve Nelson. The FDIC and the California Department of Financial Institutions are looking at Summit Bank … move your accounts ASAP … I had banked at Summit Banks [sic] Hayward Office. Service was poor and Summit Bank closed this office. Whats [sic] up with that. All the customer [sic] were left high and dry. This is a piss poor Bank. I would suggest that anyone that banks at Summit Bank leave before they close … Move your accounts now before its [sic] too late.”

I’m guessing Rogers is not an English major.

Defamation Lawsuit

Summit Bank was not amused and sued Rogers for defamation – publishing false statements with the intent to defame the Bank’s good name and reputation. Having filed the lawsuit not knowing who Rogers was, they named him as a “Doe” defendant, later to learn he was a former vice-president and chief credit administrator in 2007 and 2008, when he resigned.

The Bank had the legal burden to establish that Rogers’ postings were “illegal as a matter of law.”

Financial Code Section 1327

Summit cited Financial Code section 1327 which in short reads: “Any person who willfully and knowingly makes … any statement or rumor … which is untrue and is directly or by inference derogatory to the financial condition …. of any bank doing business in this state … is guilty of a misdemeanor.”

Financial Code section 1327 was enacted in 1917 after several bank runs were ignited or exacerbated by published statements that occurred during the Bank Panic of 1907-1908. I remember it well; sent several incendiary e-mails myself.

Unconstitutional

Rogers clearly violated section 1327. Is that long-standing protective bank law constitutional? No. In fact, the Court eviscerated 1327 – finding it unconstitutional every which way but sideways and probably even sideways:

* Section 1327 is facially unconstitutional because it does not include a malice element – proof that the defendant knew his statements were false or reckless.

* Section 1327 is facially unconstitutional because it is vague. What’s a “rumor?” When is a statement “derogatory” to the bank or its financial standing? “Criminalizing such vagueness inhibits protected free speech.”

* Section 1327 is unconstitutionally overbroad and as such will “kill” constitutionally protected speech.

* Section 1327 is content-based regulation of speech as it punishes only “derogatory” speech about the financial condition of banks, not positive speech, and content-based regulations must be narrowly tailored.

Ruling

Rogers’ posts on Craigslist are not illegal under Financial Code section 1327 because the Code itself is illegal.

Rogers’ messages are “free-flowing diatribes (or ‘rants’) in which he does not use proper spelling or grammar, and which strongly suggest that these colloquial epithets are his own unsophisticated, florid opinions about the Bank.” “Name calling, exaggeration and ridicule” are generally non-actionable speech.

In one case discussed by the California Court of Appeal, an anonymous person posted that the corporate officers of a business consisted of “cockroaches,” “losers,” “boobs,” and “crooks,” all found by a court to be “crude satiric hyperbole.” Non-actionable opinions.

Summit Bank loses the first round of this lawsuit, which I can almost accept. And a malcontent gains more power than he deserves.

Jim Porter is an attorney with Porter Simon licensed in California and Nevada, with offices in Truckee and Tahoe City, California, and Reno, Nevada. He was the Governor’s appointee to the California Fair Political Practices Commission and McPherson Commission, both involving election law and the Political Reform Act. Jim’s practice areas include: real estate, development, construction, business, HOAs, contracts, foreclosures, mediation and other transactional matters. He may be reached at porter@portersimon.com or at the firm’s website http://www.portersimon.com.


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