Media Company Wins Sanctions Against Plaintiffs’ Lawyer!

How would you feel if your company were forced to defend itself against something that it never even said?

If your client or your company has ever been victimized like that, you now have some support for going after the frivolous plaintiff – and its lawyer.

In early 2005, an attorney representing a public company gave Cable News Network 24 hours to stop a third party, who was using the screen name “wolfblitzer0,” from posting material the attorney’s client found objectionable. The postings were to a Web site hosted by Lycos and included the following comments:

•Call the jewishanti-defamation league on this zwebner crook, always hiding behind israeli president moshe katzav and using israeli army for fraud now!!! He won’t even be welcome in israel at this rate. [sic]

• Salcorptx, zwebner used moshe katzav, predident of israel, for tout fraud as well, what’s your point? He used the u.s military in iraq for tout fraud as well. So what’s your point? [sic]

• Zwebner uses dead american soldiers and lie of delivery of airwaterfraud machines to iraq to defraud americans and launder money overseas. [sic]

There was utterly no basis for the demand against CNN. The company had no ownership interest in Lycos. CNN journalist Wolf Blitzer had no connection to the postings. Neither of them knew who was posting the statements.

The lawyer who had contacted CNN on behalf of Universal Communications Systems, Inc. (a holding company involved in various businesses including broadband wireless Internet) and its CEO, Michael J. Zwebner, did not even wait the 24 hours to file a defamation action against CNN and Wolf Blitzer in the U.S. District Court for the Southern District of Florida. CNN would soon learn that the plaintiffs had previously filed at least five other lawsuits relating to material on Lycos’ Web sites.

Counsel for Universal Communications sent a letter on January 31, 2005, suggesting that CNN cooperate in discovering the identity of the author of the postings, but it refused to dismiss the complaint. CNN responded with a letter under Rule 11, Federal Rules of Civil Procedure, demanding that the plaintiffs dismiss the complaint. When the letter proved unavailing, CNN filed a motion for dismissal and sanctions.

District Court Judge Adalberto Jordan dismissed the complaint. He later granted CNN’s motion for Rule 11 sanctions. The Court cited the initial letter sent to CNN’s in-house counsel by Universal Communications’ lawyer, which said, “my clients believe there are both political and business pressures that can be brought to bear by CNN/AOL upon Lycos to cause them to exercise responsible internet community citizenship ...” In its order, the Court noted the following:

… this statement evinces that the plaintiffs filed their complaint in federal court for the sole underlying purpose of exerting “political and business pressures” upon a defendant in another lawsuit, and to obtain discovery it had been denied in the other cases.

On February 10, 2006, the District Court awarded the bulk of CNN’s and the other defendants’ fees – and ordered the award to be paid by the plaintiffs’ counsel. The Court made no bones about its dismay at counsel’s conduct, writing that “a relatively heavy monetary sanction is necessary” to deter the lawyer “from pursuing frivolous suits like this one.” Judge Jordan said he found it astounding that the lawyer “is convinced” that gaining a “tactical” advantage in the other litigation “was a legitimate reason for filing the suit” against CNN. The judge concluded:

I do not issue Rule 11 sanctions lightly. In my 6 years on the bench, I have only awarded Rule 11 sanctions once or twice. But this is a case where they are warranted.

The Eleventh Circuit apparently shares Judge Jordan’s dim view of the litigation. In the plaintiffs’ appeal of the dismissal, four days after the Rule 11 award in the District Court, the appeals court issued a decision affirming on the merits. The Eleventh Circuit also awarded the defendants double costs and fees in defending the appeal.

Holland & Knight represented Turner Broadcasting System, CNN and Wolf Blitzer in this litigation.