The Hamilton Spectator
Friday, July 17, 1998

Philip to make defamation case public

by David Akin,

Philip Services Corp. is in a Hamilton courtroom this morning presenting its first public evidence of what it says is a sustained campaign of harassment and defamation against its employees.

The alleged defamation took place on an Internet message board operated by Yahoo Inc. of Santa Clara, Calif.

Philip has filed two defamation suits, one in California on June 4 and a second one in Ontario June 24. Details about the Ontario suit were sealed by court order on Philip's request.

Today, Philip is asking a judge to unseal that file. The Spectator is also making a separate but similar request.

Philip has served notice on seven people it believes may become defendants of the suit. None of those individuals has been identified.

Yahoo operates several so-called computer message boards, where investors and others can trade information about a company. Until earlier this year, the discussion on the Philip message board was largely legitimate discussion and criticism of the company.

Since February, though, the company alleges that hundreds of posts have gone beyond legitimate criticism.

On March 2, for example, a message from someone using the alias CountBuster said: "(Philip) is BreX with a little pollution, corruption, and organized crime to boot."

Another refers to Philip officials having "drug cash to launder". Many others speculate on the sex habits of senior managers.

"The defendants in this action have published more than 800 messages on the Yahoo! Message Board ... harassing (Philip) employees by invading their privacy, stalking them, defaming them, (and) injuring their relations with their employer", Philip says in its notice of motion before Ontario Court (General Division) Justice Walter Stayshyn this morning.

To preserve evidence that may be needed in a future trial, Philip is asking Stayshyn to order defendants not to erase their computer hard drives, computer printouts, or floppy disks.

Today's proceedings come as the company seeks to recover from a copper trading scandal that cost it millions of dollars and precipitated the crash of its stock. Philip's share price hit an all-time low of $3.65 in mid-day trading yesterday on the Toronto Stock Exchange.

The proceedings are also significant for Internet users.

The methods Philip is using in its suit raise new questions about the rights and responsibilities of Internet service providers, online content providers, and those who seek to preserve their anonymity on the Internet. Some critics say Philip's actions are tantamount to censorship and stifle free speech. Others say Philip is right to pursue those it says defamed it on the Internet and that individuals should be held responsible for what they say, even in cyberspace.

Canadian courts have limited experience with freedom of speech on the Internet, particularly in civil matters such as libel and slander. Several Internet service providers and one software firm were required by the court to provide information about their customers or employees. Those orders were issued behind closed doors June 24 and forbade the firms under the order from telling their customers about them.

Those Internet service providers are NetAccess Systems Inc. of Hamilton, Weslink Datalink Corp. of Hamilton, AOL Canada Inc. of Toronto, Golden Triangle Online of Kitchener, InterServ of Seattle, Wash., iStar Internet Inc. of Ottawa, Software AG Systems (Canada) Inc. of Cambridge, Focus Technologies Networks of Mississauga, and R.D. Nickel and Associates of Cambridge.

Philip says, in an affidavit filed in support of today's court proceedings, that it has not yet received all the information it required of those firms. Golden Triangle Online, NetAccess Systems Inc., Weslink Datalink Corp., and Software AG Systems have complied with the orders.

Focus Technologies and R.D. Nickel and Associates are now associated with or are part of Software AG Systems.

InterServ no longer exists.

The order to iStar Internet has been partially complied with, Philip says in its affidavit.

Philip has been informed that the information it required from AOL Canada Inc.'s must be obtained from its parent firm, America Online Inc. of Dulles, Va. Philip is seeking that information through the U.S. court system.

America Online has not received a court order nor has it provided any information about its subscribers.

Philip says information it receives from America Online will help it reveal the identity of CountBuster, who Philip believes, along with Sceptic666, to be among the worst offenders.

Philip has served notice on seven of its anonymous adversaries. Their identities have not been made public.

Former Hamilton alderman John Gallagher said yesterday he had received notice from Philip. Former Philip employee Michael Hilson received a similar notice from Philip.

Gallagher has admitted he used several pseudonyms to post messages on the Yahoo board.

He said yesterday he will not be in court this morning and does not plan to oppose Philip's request to unseal the court file.

Copyright © 1998 by The Hamilton Spectator. All Rights Reserved. Reprinted with permission.