I had read about this story earlier and found it pretty interesting. First, here's a brief review of the conclusions of law by the state of Massachusetts on the original alleged actions of the mortgage company (bold mine):
9. Books and records reviewed by the Division's examiners during the 2008 examination/inspection revealed that Mortgage Specialists falsified asset and income information in three residential loan transactions, each involving stated-income loan products, originated on behalf of a single borrower over a period of less than twelve months as described below...41. Based upon the information contained in Paragraphs 1 through 32, the Commissioner has determined that:
- Mortgage Specialists has engaged in, or is about to engage in, acts or practices which warrant the belief that the Corporation is not operating honestly, fairly, soundly and efficiently in the public interest in violation of standards governing the licensing and conduct of a mortgage broker including, but not limited to, the provisions of the Division's regulations at 209 CMR 42.00 et seq.
It's interesting to me that while the Massachusetts investigation made a clear finding of fact that the firm committed specific bad acts, I was unable to find such a clear conclusion from the NH Banking Department's public documents. Unless I missed it, NH only provided unproven allegations, while MA actually reached conclusions of law. I suppose that whether the firm committed the alleged acts is an aside w.r.t the order to release information, although I'd be lying if I didn't admit that the MA findings do color my opinion of the firm.
Anyhow, on the matter of the defamation suit and the judge's decision, I thought the Columbia Journalism Review, referencing the Citizen Media Law Project, posted the best rebuttal to Justice McHugh's order:
The county judge, one Kenneth R. McHugh, ordered the Implode-O-Meter (whose incorporated name is awesome: Implode-Explode Heavy Industries Inc.) to hand over its source, to out its commenter, and to refrain from republishing the chart or the comment.
The Citizen Media Law Project (based at Harvard Law) says that’s prior restraint:
In fact, Justice McHugh’s order is a prior restraint because it enjoins ML-Implode and its agents, servants, employees, and representatives from “displaying, posting, publishing, distributing, linking to and/or otherwise providing any information for the access or other dissemination of copies and/or images of [the] 2007 Loan Chart and any information or data contained therein.” This is a classic prior restraint because it “actually forbid[s] speech activities.” Alexander v. United States, 509 U.S. 544, 550 (1993).It does a nice job of running down another several reasons why this argument is terrible. But tell that to the judge, who ruled:
One would have hoped that when a legitimate publisher of information was notified of the fact that certain unauthorized information was given to it which was then published, presumably in good faith, the publisher would, in order to maintain the integrity of its publication, willingly provide the wronged party with the information requested.Um, no, dude.
Further, Judge McHugh wrote:
The maintenance of a free press does not give a publisher the right to protect the identity of someone who has provided it with unauthorized or defamatory information.Methinks McHugh needs to go read up on his First Amendment.
Citizen Media Law Project writes that it expects this case to be overturned by the state’s Supreme Court:
For now, the decision stands as an excellent example of why we need strong procedural safeguards for courts to follow when deciding whether or not to compel the identification of anonymous speakers, why shield laws that constrain judicial discretion are important, and why constitutional doctrine should limit judicial power to grant prior restraints to such a vanishingly small category of cases.Indeed.
IMO, the fact that there are two separate issues in play may be getting lost. The first is the ability of the press, including bloggers, to publish relevant information about a company that's under scrutiny (in this case a 2007 loan chart), and to protect the sources of that information. IMO, the dissemination of relevant (and true) information about a firm that's been accused by state officials of fraud seems reasonable and in the public interest. The bar to prevent such publication should be very very high. To me this one is a no-brainer, but that's probably because I'm not a lawyer and have no legal training.
The other issue being litigated seems more complicated. It has to do with whether commenters on blogs or newspaper websites should be considered protected sources. Clearly, there is a difference between a source telling a journalist, including a blogger, something in confidence, and a commenter posting something on a website. The legal ramifications of that difference are now being worked through all over the country.
When I comment on a news story, am I a source to that story? Am I an extension of the reporter's work? Some would say no, that it's no different from compelling any website owner to reveal the identity of a commenter or any hosting service to reveal the identity of the owner of a website. Newspapers have contended that anonymous comments are an essential part of the public discourse on any subject and are in fact a part of press freedoms. Here's an article on a recent decision by Maryland's highest court on the matter and here's a write-up of a handful of other active cases.
IMO, the real risk in all this is that website owners and hosting services might one day be compelled to validate the identity of people using their services. That would be very worrisome and would IMO, represent a very unhealthy restriction on public discourse. But that's not the case being litigated here, at least not yet anyway.
Links:
NH Banking Department case history (scroll down to 08-223)
Home loan firm accused of fraud - Telegraph (07/08)
Mortgage company accused of fraud - Union Leader (07/08)
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