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Victories

Morris & Stone Wins $1.5 Million for Internet Defamation Victims

In this case, we represented a business and the individual who owns that business. The defendant, a medical doctor named Pankaj Karan, was starting his own business, MDTelexchange, and traveled to an overseas company also owned by our client (we’ll call that the “foreign company”) and entered into a contract for the creation of some custom call center software.

And that is where the divergence in the two versions of the story begins. Our clients asserted (and proved at trial) that the working software was delivered on time by the foreign company. The defendant, Dr. Karan, claimed otherwise, and blamed the failure of his start-up company on the software. 

Dr. Karan’s claims never made sense, because while the software would have been useful in his business, it was in no way essential. Blaming the software for the failure of the business was akin to saying a business failed due to a lack of business cards. But for whatever reason, Dr. Karan chose to blame our clients, and in an email announced that he was going to “work night and day to inflict the maximum amount of financial pain that is allowed under the law.” To that end, he ignored the fact that his contract was with the foreign company, and instead attacked our client personally, along with his other company, taking to the Internet to trash their reputations.

This is a scenario that I see over and over in defamation cases. Someone becomes unhappy with a business or individual, and decides to criticize them on-line. It might even begin with a laudable motive – just putting out the word to the public to avoid a business that did not satisfy the critic. I will vigorously defend the right of anyone to go on line and publish a legitimate criticism of a business.

But something happens that takes the person beyond a legitimate review. As the person types the words, he or she decides it’s just not stinging enough and won’t cause enough harm. In this case, Dr. Karan must have felt that a legitimate review of the foreign company, stating that in his opinion the software did not work as promised or was not delivered on time, just wasn’t hurtful enough. He posted two articles on his own blog, and sent an email to our clients’ customers. In the email and postings, Dr. Karan’s comments had almost nothing to do with the alleged problems with the software. Indeed, he abandoned his claim that the software was late, and instead claimed that it had never been delivered at all. He added that our client had cheated an employer ten years earlier, and that his company had failed to pay vendors hundreds of thousands of dollars. Although our clients had never received a single complaint from a customer, Dr. Karan claimed that “they are swindlers of the highest kind and have milked many of their clients of money and time.”

At trial, Dr. Karan could not identify a single customer that our clients had “swindled”, he could not identify a single vendor they had failed to pay, could not specify how he had cheated his former employer, and acknowledged that the software was in fact delivered. Today, an Orange County jury, known for being very conservative with damage awards, awarded $1.5 million jointly and individually to both of our clients for the damage to their reputations and business, caused by Dr. Karan.

In a standard civil action, the plaintiff has the burden to prove the case. This is true in a defamation action as well, but since truth is a defense to defamation, the burden of proving a statement is true falls on the defendant. I can’t fathom how defendant thought he would get away with what he published in this email and on his blog, but I think he may have thought he would be safe because we could not prove a negative. In other words, how do you show that you have never defrauded any of your customers? Bring in every customer you have ever worked with to testify that you did not defraud them? That would be impossible, and that is why the law puts the burden on defendant to prove the TRUTH of the statements. Dr. Karan could not prove his statements were true, and was therefore liable for Internet defamation.

Pankaj Karan was admirably represented at various times during the action by Randolph Catanese and Douglas Hume from Catanese & Wells, David R. Calderon from Barth, Berus & Calderon, and Palak Chopra from the Law Offices of Palak Chopra.

[UPDATE — January 2, 2014]  Dr. Karan did not go silently into the good night. His attorneys appealed the $1.5 million verdict, claiming there was insufficient evidence to support an award of that size. To that claim, and in denying the appeal, the court opened its opinion with the sentence, “All things considered, appellant Dr. Pankaj Karan got off cheaply in the trial court.” Better yet, in commenting on our brief, the court stated:

[Dr. Karan] has misstated the record in numerous particulars, as shown in a respondents’ brief so devastating it has left Karan, like Job, with no reply but silence and a hand over his mouth.

Morris & Stone Victory — $200,000 from Defendant Who Failed to See Wisdom of Walking Away

Perhaps because the adrenaline and endorphins flow during a courtroom battle, I become very thoughtful in the calm that follows. I won a small but satisfying court victory recently in an Internet defamation case, and it made me realize how much the process mirrors a scene from a movie.

The movie is Taken. Even if you haven’t seen the movie, you probably saw the scene to which I refer since it was shown in the trailers. The main character, who we come to learn is some sort of retired Über-spy, is on the phone with his teenage daughter when she is kidnapped. He hears the bad guy pick up the phone, and he calmly gives the following speech:

I don’t know who you are, and I don’t know what you want.
If you are looking for ransom, I can tell you I don’t have money.
But what I do have are a very particular set of skills;
skills I have acquired over a very long career.
Skills that make me a nightmare for people like you.
If you let my daughter go now, that will be the end of it.
But if you don’t, I will look for you, I will find you and I will kill you.

Most every Internet defamation case I handle starts with such a moment. Not nearly so dramatic, of course, and there are no deaths involved if the defendant doesn’t listen to me, but the concept of a choice is the same.

Most of my defamation clients aren’t seeking money initially; they just want the bad guy to stop defaming them. My marching orders are usually just to get the person to take down the false comments. So I write to the bad guy, explaining that this does not need to go any further. He strayed from the path and said and did some things he shouldn’t have, but if he just takes down the posts and walks away, “that will be the end of it.”

That is the moment in time. I am affording the prospective defendant the opportunity to avoid sending his life in a bad direction. I am less of an advocate and more of a caregiver, just trying to convince the patient to stop engaging in self-destructive behavior. But he makes the ultimate decision whether to accept that help, or to continue on his path.

In Taken, the kidnapper could not help himself and responded by saying, “good luck.” He did not take the skill set seriously enough, thinking he would be impossible to find. Today’s defendant also did not take the skill set seriously enough, thinking since he lived across the country we would never pursue him. He was one of a few on-line competitors with my client, and had engaged in some trash-talking that escalated into defamatory comments about my client’s business practices. All he had to do was take down the false statements and walk away and that would have been the end of it. He refused, and today a judge ordered him to take down the false statements, never to make the statements again, at risk of fines and imprisonment, and to pay my client over $200,000.

Pick your battles. I will defend to the death your right to post honest comments on the Internet. If you want to take on a plaintiff that you feel is trying to shake you down, then I’m with you one hundred percent. But don’t get into a court battle just to prove who has the bigger . . . lawyer. The defendant in this case had no moral high ground. He knew what he was saying about my client was untrue, so why on earth wouldn’t he take the opportunity to walk away? As a famous philosopher once sang, “You’ve got to know when to hold them, know when to fold them.”

Morris & Stone Defamation Victory – Hair Transplant Doctor Stipulates to $150,000 Judgment

Internet Defamation Victory

Our client in this case was Spencer Kobren, a well known Consumer/Patient Advocate, author and the Founder of The American Hair Loss Association. Besides hosting a weekly radio broadcast, Kobren also owns and operates the online message forum baldtruthtalk.com where hair loss consumers can discuss and share their experiences with product and service providers in the hair loss industry, as well as provide commentary and reviews of hair transplant surgeons in the field.

As most Internet savvy people now know, the Communications Decency Act (“CDA”) shields the operator of a website from any liability for comments posted on an open forum. When someone on Kobren’s forum posted critical comments about a Beverly Hills hair transplant surgeon, the doctor took exception. However, instead of contacting Mr. Kobren or his staff to ask for help in properly addressing  negative comments posted by one of his former patients, the doctor decided to defame our client by posting completely fabricated reviews and comments on various blogs, review sites and social media sites, accusing  Kobren of fraud, coercion, extortion, organized crime and the running of a criminal enterprise.

As an aside, some sites encourage negative comments, and have no concern as to whether or not they are true. Operators of these sites are also protected by the CDA, but knowingly allowing false and defamatory comments to be posted was not the intention of the CDA, and we will not represent a party who is using the CDA to that end. This was not that type of case. Spencer Kobren runs a very positive and useful board, and will intervene where appropriate when the content crosses the line.

Back to the story. Despite my repeated postings of articles about the wisdom of a walk-away, and even this one, which is almost identical to this case, some defamers feel they must show bravado, claiming they can prove the truth of all of their comments. It’s as though they never think it through until I serve the first set of discovery questions, which forces them for the first time to sit down and put in writing all the facts they are contending support the statements they made. I have this image in my mind of them sitting at their kitchen table, my discovery requests spread in front of them, and after about 45 minutes of trying to answer the questions and realizing that there is not one fact they can offer that would support the defamatory statements they made, saying to themselves, “Man, I am SCREWED!”

Such a moment must have occurred in this case. Defendant first did not even respond to the complaint, then he hired an attorney to undo the default, then he fired that attorney, and agreed to remove all the defamatory comments, never to speak ill of our client again, and to pay $150,000.

Morris & Stone Victory — Another Blow Against Internet Defamation

Defamation of Character on the Internet
A hard-fought victory for free speech.

The defendant in this case was Elvia Orrillo-Blas, MD, an emergency room doctor at a hospital in the Inland Empire. When it was decided that her annual contract to provide services to the hospital would not be renewed, she took to the Internet, posting multiple defamatory messages on Craigslist.com about the director she felt was responsible for the decision not to renew her contract.  In the anonymous postings, she would sometimes pretend to be a nurse or patient at the hospital when making her false claims about the director.  The director retained us to sue for Internet defamation.

One problem we had to overcome in order to prevail in this action was the fact that the director was so well regarded that witness after witness talked glowingly about him during the trial. That was great to show the falsity of the statements published by the defendant doctor, but it also showed that the Plaintiff had not suffered a significant loss of reputation since the witnesses still loved him. The jurors later explained that this love-fest was the reason they awarded a relatively moderate amount of compensatory damages, but during the trial this left me to wonder if they were fully appreciating the malice behind what defendant had done.

Not to worry; the jury came roaring back in the punitive damages phase and made very clear with the amount of punitive damages that the defendant doctor needed to be punished for her conduct. In closing argument I had explained that cases like this actually promote freedom of speech and the marketplace of ideas that we hold so dear in America, because those ideals are not served by knowing falsity. The jury apparently agreed.

As the icing on the cake, the judge then granted our request for injunctive relief, prohibiting the doctor from defaming our client in the future.  Although each instance of defamation is actionable, repeatedly suing a serial defamer is not the best solution because of the expense and delay in getting to trial.  With an injunction from the court, the doctor can actually be jailed if she repeats her false claims about our client and is found to be in contempt of court for defying the court’s order.

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Aaron Morris

Morris & Stone, LLP

Tustin Financial Plaza
17852 17th St., Suite 201
Tustin, CA 92780

(714) 954-0700

Email Aaron Morris

View Aaron Morris, Trial Attorney and Partner at Morris & Stone, with emphasis on Free Speech and Defamation Law.

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