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John T. Reed’s opposition to Russ Whitney’s Spring 2004 injunction motion 1

IN THE CIRCUIT COURT OF THE 20TH JUDICIAL CIRCUIT, IN AND FOR LEE COUNTY, FLORIDA

CASE NO.: 04-CA-003045
Judge William C. McIver

WHITNEY INFORMATION NETWORK, INC.
A Colorado Corporation,

Plaintiff,

v.

ROBERT E. YATES, an individual, and
JOHN T. REED, an individual,

Defendants.

DEFENDANT REED'S OPPOSITION TO PLAINTIFF'S EMERGENCY MOTION FOR PRELIMINARY INJUNCTION AGAINST DEFENDANT JOHN T. REED AND DEFENDANT REED'S MOTION FOR LEAVE TO ATTEND MOTION HEARING BY TELEPHONE

1. Defendant JOHN T. REED (“REED”), pro se files this OPPOSITION TO PLAINTIFF'S EMERGENCY MOTION FOR PRELIMINARY INJUNCTION AGAINST DEFENDANT JOHN T. REED AND FOR LEAVE TO ATTEND ANY HEARING RELATED TO THIS MOTION BY TELEPHONE.
INTRODUCTION
2. This is a First Amendment, prior-restraint motion. Plaintiff has been attempting to stifle a wide variety of honest critics-including Defendant REED-through abuse of process for a number of years.
3. As many observers have commented, it is extremely difficult for a public figure like Plaintiff, which is a publicly-traded corporation regulated by the Securities and Exchange Commission, to prevail in a libel suit against a media defendant like REED. As a result, plaintiffs' attorneys have adopted the ploy of trying to use other causes of action to trick courts into granting impermissible prior restraint of protected speech and to allow suits to progress farther than the early dismissals common in media libel cases. In particular, such attorneys are trying to mischaracterize public-figure-media-libel cases as tortious interference, trademark, unfair competition, and trade secrets cases.
4. The correct cause of action in a lawsuit is determined by the facts of the case and the pertinent statutes and court decisions, not by plaintiff's attorneys. If plaintiffs' attorneys could determine the cause of action, they could circumvent laws like statutes of limitations, libel notice/retraction requirements, and the “actual malice,” burden of proof, and “clear and convincing evidence” standards of court decisions like Times v. Sullivan, [376 U.S. 254 (1964)].
5. Accordingly, the courts must look at the facts of the case and recharacterize the cause of action when appropriate. “'We look for the reality, and the essence of the action and not its mere name.' A contrary result might very well enable plaintiffs in libel to circumvent the notice requirements of Fla. Stat. 770.01 by the simple expedient of redescribing the libel action to fit a different category of intentional wrong.” Orlando Sports Stadium, Inc. v. Sentinel Star Company, 316 So. 2d 607 DCA 4th (1975)
6. This is such a case. The gravamen of all the litigation by Plaintiff Whitney Information Network, inc. (WIN) and Russ Whitney (WHITNEY) against Defendant REED is to prevent him from publishing adverse facts (e.g., WHITNEY's robbery conviction) or opinion (e.g., REED's “I do not recommend Whitney's services”) about WIN or WHITNEY. In this case, WIN also appears to be attempting to prevent Defendant YATES from publishing adverse facts or opinions about WIN.
7. With regard to Defendant REED, this case is quite similar to Seminole Tribe of Florida v. Times Publishing Company, Inc. [780 So. 2d 310 District Court of Appeals Fla. 4th District (2001)]. It is pertinent to this motion because it goes to whether Plaintiff is likely to prevail at trial against Defendant REED.
8. In Seminole, the Tribe was unhappy with articles published by Times Publishing. Instead of suing for libel, they sued for tortious interference. Times Publishing moved for dismissal for failure to state a cause of action. There is a similar motion by REED now pending before this Court. The Times motion was granted by the trial court and upheld by the appeals court.
9. As in this case, plaintiff Seminole pointed to the Times' soliciting confidential and proprietary documents from Seminole employees. Although the Times was much more proactive than REED's actions as alleged in the complaint, the Seminole court nevertheless held that such solicitation by reporters, “…is not the kind of improper or unjustified behavior that could support the tort of interference.” Ibid.
10. In Seminole the court further noted that “…methods used were not tortious in themselves, content of articles resulting was a matter of public concern and reporters' conduct involved constitutionally protected news gathering. A 'routine' news gathering technique for which a newspaper can not be constitutionally punished includes the practice of asking potential witnesses for information.” Ibid at 311, citing the First Amendment to the U.S. Constitution.
11. REED is both an “Old Media” and a “New Media” reporter [REED Declaration]. He has been asking readers of his books and newsletter and visitors to his Web site to provide pertinent information for decades.
12. “Without some protection for seeking out the news, freedom of the press could be eviscerated.” Branzburg v. Hayes, 408 U.S. 665 (1972) “…[I]f a newspaper lawfully obtains truthful information about a matter of public significance then state officials may not constitutionally punish publication of the information absent a need to further a state interest of the highest order.” The Florida Bar v. B.J.F., 491 U.S. 524 (1989)
13. “We question whether this [tortious interference with a business relationship] cause of action could ever be stretched to cover a case involving news gathering and publication. In many ways, this is a defamation case in the clothing of a different tort. As the Seventh Circuit has observed, permitting tortious interference in this context would allow an 'end run' around the rules that apply to invasion of privacy and defamation involving media defendants.” Seminole Tribe of Florida v. Times Publishing Company, Inc. [780 So. 2d 318 District Court of Appeals Fla. 4th District (2001)].
14. “Any libel of a corporation can be made to resemble in a general way this archetypal wrongful-interference case, for the libel will probably cause some of the corporation's customers to cease doing business with it; and whether this involves an actual breaking of contracts or merely a withdrawal of prospective business would make no difference under the modern law of wrongful interference. But this approach would make every case of defamation of a corporation actionable as wrongful interference thereby enabling plaintiff to avoid the specific limitations with which the law of defamation—presumably to some purpose—is hedged about.” Brown & Williamson Tobacco Corp. V. Jacobson, 713 F 2d 262, (7th Cir. 1983)
LONG LIST OF FACTORS TO BE CONSIDERED BY THE COURT
15. Deciding when behavior constitutes tortious interference as opposed to lawful behavior, or another tort like defamation, is a complex matter. Accordingly, it is difficult for any court to decide that a plaintiff is likely to prevail in such a case as required to grant an emergency preliminary injunction. To quote Plaintiff's own Memorandum of Law ¶ I.A., to win a preliminary injunction, it must “…demonstrate…ii) a substantial likelihood of success stemming from a demonstrably clear legal right…”
16. In contrast to that standard, the factors to be weighed by the Court are subjective and numerous:
“(a) the nature of the actor's conduct,
(b) the actor's motive,
(c) the interest of the other with which the actor's conduct interferes,
(d) the interests sought to be advanced by the actor,
(e) the social interest in protecting the freedom of action of the actor and the contractual interests of the other,
(f) the proximity or remoteness of the actor's conduct to the infringement, and
(g) the relations between the parties.”
Plaintiff in this motion does not adequately address these factors, totally ignoring many of them.
17. “The plaintiff's interest in his contractual rights and expectancies must be weighed however against the defendant's interest in freedom of action. If defendant's conduct is predatory…the scale on his side may weigh very lightly, but if it is not predatory it may weigh heavily. The issue is whether in the given circumstances his interest and the social interest in allowing the freedom claimed by him are sufficient to outweigh the harm that his conduct is designed to produce. In deciding this issue, the nature of his conduct is an important factor.” Restatement (Second) of Torts ¶767
LEGALITY OF THE CONTRACT IN QUESTION
18. “One who by appropriate means causes the non-performance of an illegal agreement or an agreement having a purpose or effect of violation of an established public policy is not liable for pecuniary harm resulting from the nonperformance. Illegal agreements and those in violation of public policy are commonly held to be entirely void and so not contracts at all…[There is] no liability for causing their breach.” Restatement (Second) of Torts §774. Upon information and belief, Plaintiff is engaging in numerous illegal activities that it wishes to conceal from the public and the authorities. Contracts designed to accomplish such purposes are illegal and against public policy.
19. In the emails he sent to YATES, REED explicitly pointed out to YATES the implications of illegal contracts and those that violate public policy.
20. In order for the Court to conclude that Plaintiff is likely to prevail at trial in this case, it must first conclude that the pertinent contracts are legal and do not violate public policy. Upon information and belief, Plaintiff did not attach all the pertinent contracts-both those that YATES signed and those that he declined to sign-to either the complaint or to this motion.
'WITHOUT JUSTIFICATION'
21. ¶56 of the complaint alleges that defendant REED interfered “without justification.” This, however, is merely a conclusory statement. Neither the complaint nor Plaintiff's motion explains how Plaintiff drew that conclusion or how they will persuade the Court to agree. REED had justification to respond to YATES' emails because of his being sued three previous times by WIN and WHITNEY and gathering information for the story about WIN and WHITNEY that REED has been reporting.
22. “If defendant interferes with contract in order to safeguard preexisting economic interest of his own, defendant's right to protect his own established economic interest outweighs plaintiff's right to be free of interference, and his actions are usually recognized as privileged and nonactionable… Heavener v. R.W. Florida Region, Inc., 418 So. 2d1074 (Fla. 5th DCA 1982) WIN and WHITNEY have been suing Defendant REED since June 2002. Their suits seek far more in damages than REED's net worth. YATES depicted himself to REED as one who might have valuable evidence that REED might be able to use to defend himself against WIN and WHITNEY suits. Plaintiff should not be able to threaten REED's entire net worth by initiating litigation against REED, then prevent REED from gathering evidence to defend himself against such a suit by paying hush money to, and signing secrecy agreements with, persons who have evidence useful to REED. “There can be no interference with contractual relationship where action complained of is undertaken to safeguard or promote one's financial or economic interests.” Ethyl Corp. v. Balter, 386 So. 2d 1220 (Fla. 3d DCA 1980)
'UNLAWFUL SOLICITATION'
23. ¶17 of Plaintiff's emergency motion for a preliminary injunction alleges that Defendant REED engaged in, “…unlawful solicitation of Plaintiff's confidential and proprietary information from YATES…” There is no law against solicitation of confidential and proprietary information. Defendant REED is an investigative journalist. [REED declaration] He solicited information about Whitney from readers in general. Had Defendant YATES not revealed his unsolicited communication with Defendant REED on his own initiative, REED would now be able to conceal YATES' identity under either the Florida or California shield laws [Fl Statute 90.5015 and California Constitution Art. I §2(b), Evidence Code §1070].
24. At his Web site, Defendant REED has also long urged readers not to break the law with regard to helping him in the Whitney litigation. (Exhibit S) Plaintiff's Exhibit E to this motion shows the Court portions of REED's Web page titled “John T. Reed' main page about Russ Whitney.” Plaintiff deliberately left out the portion under the subhead “Checking out Whitney's claims.” The following passage is there.
“Be careful though. Some states have laws about unauthorized investigating. Misrepresenting whom you are to get information, for example, could get you into trouble. I advocate an ethical code of 1. Tell the truth. 2. Keep your promises. 3. Treat others as you want to be treated. That applies to investigation of Whitney and I want anyone trying to help me to adhere to that standard.”

MEANS OF INTERFERENCE
25. Improper interference is likely to be found when the means of interference is itself tortious, e.g., fraud, violence, threats. “…but when the means adopted is not innately wrongful and it is only the resulting interference that is in question as a basis for liability, the interference is more likely to be found to be not improper.” Restatement (Second) of Torts §766C.
MATTER OF PUBLIC CONCERN
26. Defendant REED has written about WIN and its majority owner WHITNEY because they are matters of public concern. WIN is a publicly-traded corporation the shares of which trade on the Over-The-Counter Bulletin Board. As a publicly-traded corporation, WIN must file regular public reports with the Securities and Exchange Commission (SEC) and comply with numerous other laws and regulations that relate to public companies. According to its SEC reports, WIN employs hundreds of persons in the U.S., Canada, Costa Rica, and the United Kingdom. According to its 2003 annual report filed with the SEC, WIN's gross income that year was approximately $100 million.
27. WHITNEY is the chief executive officer, chairman of the board, and majority owner of WIN. He has written a number of books that are sold in book stores nationwide. He also appears continuously in television infomercials and large newspaper display ads around the U.S.
28. REED had a small amount of information about WHITNEY and WIN at his Web site in 2002 and prior because of WHITNEY's prominence as a real estate guru. Among other things, REED's Web site has long featured a “guru-rating page” where REED commented on various real estate investment gurus including WHITNEY. REED also reviews books and seminars in his newsletter Real Estate Investor's Monthly.
29. Broadway producers cannot sue a theater critic for tortious interference when he pans their play even to the point of causing it to shut down immediately after the review. Restaurateurs cannot sue food critics for tortious interference because of a bad review that hurts business.
30. When WIN and WHITNEY first sued REED, he began investigating them in order to defend the suit. He was surprised to find that WIN and WHITNEY were a much bigger story than he previously realized. WHITNEY is the only real estate investment guru with a publicly-traded company. That means he is the only guru who provides a window into this otherwise secretive industry through his regular filings with the SEC. He is also extremely litigious which means he has left an extraordinary paper trail in courts around the U.S. As a result of his two-and-a-half year investigation, REED has learned and revealed to the public that WHITNEY grossly exaggerated his success and omitted many material facts about his business life. For example, he claimed he owned $1 million of real estate by age 25. REED visited the city in question-Schenectady, NY-and discovered that the accurate number was $98,000 and that WHITNEY was said to be a “tenant,” not a buyer, in most of the land contracts, not deeds, that he used to “acquire” the properties in question. (Exhibit T)
31. In their second amended complaint, WIN and WHITNEY said that a state agency had refused to let them sell their stock in that state because of REED's web site. The letter from that state agency-the Arizona Corporation Commission-to WIN apparently demands answers to questions inspired by REED's Web site articles on WHITNEY. (Exhibit U) A letter from NASDAQ to WIN demands similar answers and mentions REED's Web site by name. (Exhibit V) WIN apparently decided to abandon its million-share stock offering and application to be listed on the NASDAQ SmallCap Market rather than answer these questions. It would be hard to find a stronger endorsement of the value to the public of REED's writings about WIN and WHITNEY, or a stronger statement that the information about WIN and WHITNEY at REED's Web site covers matters of public concern.
FOURTH MOTION BY WIN FOR EMERGENCY PRELIMINARY INJUNCTION
32. This is the fourth time Plaintiff has asked a court for an emergency preliminary injunction against Defendant John T. Reed-the fifth counting a time when Plaintiff tried to convince Defendant REED that he came “under the ambit” of an injunction against a third party.
33. On June 25, 2002, the first was a complaint filed by Plaintiff and Russ Whitney against Defendant Reed in the U.S. District Court for the Middle District of Florida Fort Myers Division Case number 2:02-CV-288-FTM-29 DNF. That complaint requested an emergency preliminary injunction. After approximately eleven months of litigation, Plaintiffs withdrew that suit without ever moving for such an injunction.
34. On January 29, 2003, the second was a complaint filed in the Circuit Court of the 17th Judicial District in and for Broward County, FL Case No. CACE 03-01788 (21). That complaint also requested an emergency preliminary injunction. On February 12, 2003, Defendant REED removed that complaint to U.S. District Court for the Southern District of Florida (Fort Lauderdale Division, Case No. 03-CV-60195 MARRA/SELTZER). Plaintiff moved for remand and attorneys fees on February 14, 2003. After approximately three months of litigation, Plaintiff withdrew their opposition to the removal. Plaintiff made no motion at that time for the emergency preliminary injunction requested in the 17th Circuit complaint.
35. On May 26, 2004, Plaintiff filed a two-and-a-half-pound motion for emergency preliminary injunction in the U.S. District Court for the Southern District of Florida Fort Lauderdale Division (Case No. 03-60195-CIV-MARRA/SELTZER). Approximately four months later, Plaintiff had that motion for emergency preliminary injunction dismissed by withdrawing their longstanding opposition to Defendant REED's motion for change of venue from Fort Lauderdale to Fort Myers. They did not refile that motion after the case was transferred to Fort Myers [Case No. 2:04-cv-305-FTM-33DNF (LAG)]
36. On January 27, 2004, Plaintiff obtained an unopposed emergency preliminary injunction against a resident of Italy who made no appearance in court. (U.S. District Court, Southern District of Florida, Fort Lauderdale Division, Case #04-60101-CIV-Cohn/Snow) Plaintiff repeatedly threatened Defendant REED with filing papers in that case to get the court to say that Defendant REED came “under the ambit” of that injunction. On one day, Defendant REED received a fax, return-receipt letter, multiple emails, and an Airborne express delivery all containing that same threat. Defendant REED ignored these threats and Plaintiff did not follow through with any filing regarding REED in that case.
37. In short, Plaintiff has formally requested “emergency” preliminary injunctions against Defendant REED on three previous occasions over a two-and-a-half-year period and threatened to file a fourth. Plaintiffs never followed up on any of these motions or the threat to the point of obtaining a decision from any of the four different judges. Obviously, these calls for a preliminary injunction have been made not to obtain such an injunction but rater for their harassment value.
38. Plaintiff solemnly swore that the first Fort Myers suit was crucial, then withdrew it. Plaintiff similarly solemnly swore in complaints and oppositions that Fort Lauderdale state and federal courts and Miami federal court were each the one true venue for the various cases they filed against Defendant REED-then they recanted and allowed each of those cases to be moved to Fort Myers federal court. Over the course of this litigation, Plaintiff WIN, WHITNEY, and their counsel have thoroughly destroyed their credibility with such “boy who cried wolf” actions.