In a brief filed in the Maryland Court of Special Appeals, we have asked the Court to enforce the Supreme Court’s rule forbidding temporary injunctions to protect the reputation of a business against allegedly defamatory criticisms. The facts of the case show the wisdom of the rule.
How the Appeal Came About
In the fall of 2013, a lawyer representing Convergex Caribbean, which describes itself as “a global financial services, in the business of enabling organizations and individuals to obtain access to sources of private capital funding for investment purposes,” filed a lawsuit in state court in Prince Frederick, Maryland against an Arizona man named Douglas Anthes who was a dissatisfied customer of Convergex. The suit revealed that Anthes had posted several reviews on such sites as Ripoff Report and Reviews Talk complaining that he had paid $10,000 to get introduced to Convergex, which exacted another $25,000 payment in return for an introduction to a third company, which demanded yet another fee to discuss financing. Anthes described the arrangement as a scam; Convergex’s lawsuit claimed these accusations were defamatory.
The lawsuit went very quickly: it was filed on November 12, 2013, and by November 15, 2013, without Anthes having received any notice that the lawsuit was pending, not to speak of notice that a TRO was being sought, the trial court had issued a temporary restraining order lasting 35 days, requiring Anthes to remove his accusations against Convergex from the sites where he has posted them, and forbidding him from posting any further defamatory postings about Convergex. The TRO was extended for another 35 days on December 18, again without notice to Anthes,
Inspection of the record, however, reveals several procedural shortcomings in addition to the lack of notice to Anthes so that he could have a fair chance to oppose injunctive relief. First, there was no admissible evidence supporting injunctive relief — no affidavits and no testimony. The complaint was verified, but only on information and belief, and its claims of falsity were exceptionally vague. The order itself appears to have been drafted by Convergex’s lawyer, and included the false statement that an attorney for the defendant had been “heard.” There was no explanation for the failure to give notice to Anthes and not even an argument about why immediate relief was required before notice could be given. The same defects were apparent in the motion to extend the TRO: no evidence supporting the motion, no explanation of the need to seek and extension without notice, and again the local judge just signed an order prepared by the plaintiff’s lawyer, this time, apparently, on the same day that the motion and proposed order were filed.
After Anthes was finally notified, he found a lawyer and removed the lawsuit to federal court, where the TRO expired and the trial judge refused to extend the TRO. But the case was eventually remanded to state court, where the trial judge convened a hearing to consider Convergex’s motion to have Anthes held in contempt, and assessed a $2400 fine because the judge felt that Anthes had not moved quickly enough to try to get his statements taken down.
Our Arguments – and Why the Case Matters
Public Citizen's brief argues the TRO was wrongly granted, most importantly because the Supreme Court has squarely held in Organization for a Better Austin v. Keefe that an injunction to restrain defamation is a prior restraint and cannot be justified by the interest in protecting the reputation of a business. Indeed, we point out that Maryland is among the many states where courts hold that “equity will not enjoin a libel” and where, consequently, even a permanent injunction against defamation would be impermissible. We also argue on procedural grounds that, under both Maryland law and the First Amendment, injunctive relief against speech should not be granted without the speaker having been given a fair opportunity to argue against the injunction, unless there is a very compelling showing both of why notice could not be given and also that the need for relief is so immediate that the court is justified in granting relief without waiting until the defendant or his lawyer can be in court to argue against any relief, or at least to help the court tailor any relief to the needs of the particular situation.
Public Citizen has been particularly vigilant in opposing preliminary injunctions against consumer criticism. Such injunctions run afoul of the American tradition of free speech, which assumes that the public can sort out truth from fiction so long as both sides have the opportunity to have their say. Preliminary injunction proceedings do not provide the high level of careful consideration that is needed ensure that defensible criticisms are not lightly found improper — the opportunity for discovery of the opponent’s case, and cross-examination in light of that discovery; the chance for both sides to research the law, to think it through carefully, and to bring it to bear on the facts of the case; the chance for both sides to present their evidence to a jury; the opportunity for the trial court loser to appeal. It’s too easy for mistakes to be made, as happened in the recent case of Christopher Dietz against Jane Perez in Northern Virginia: a trial judge split the baby and granted a preliminary injunction in part, but the Virginia Supreme Court summarily reversed. When that case came on for trial, the jury granted Dietz no relief whatsoever; my analysis suggested that the jury must have concluded that, on the key point on which a preliminary injunction was originally granted, that Dietz or his employees had taken the jewelry.
Moreover, the context of a preliminary injunction encourages rulings based on a rough sense of justice, but issuance of an injunction against speech should never be based on rough justice. I don’t doubt that there are situations in which it is appropriate to grant relief against false statements of fact that are deliberately made to hurt someone’s reputation, and that really do inflict injury. But getting such relief should not be easy.
And there is a particular problem when it is a local business that has gone to court to get relief against a distant plaintiff. The record in this case is a good example. A local lawyer walks into the local court, and the judge simply fails to ask the hard questions, fails to notice that there is no evidence, and signs whatever the local lawyer has put in front of him. Strict enforcement of the rule against prior restraints is needed to ensure that consumer criticism is not taken offline simply because a local business can afford legal representation.
