The case, The Mortgage Specialists, Inc. (MSI), v. Implode-Explode Heavy Industries, stems back to 2008 and revolves around Las Vegas-based Implode-Explode and its website, www.ml-implode.com, which discusses the mortgage industry meltdown.
In the original action, MSI was granted a temporary injunction compelling Implode-Explode to remove its "2007 Loan Chart" from the company's website. MSI also sought the identity of an anonymous user known as "Brianbattersby," who allegedly posted defamatory comments about MSI and its president.
While Implode-Explode reportedly removed the loan chart and comments, it refused to provide the name of its anonymous sources, at which point MSI sought and won a permanent injunction against the company.
In this week's hearing, Implode Explode attorney Jeremy Eggleton of Orr & Reno decried the injunction as a violation of the First Amendment that tramples on the rights of his client by imposing prior restraint on his ability to speak freely.
MSI counsel Alexander Walker of Devine, Millimet & Branch, retorted that "This is not the Pentagon Papers … They [Implode Explode] are not journalists."
Although both parties concede that the ml-implode.com website is not The New York Times, the question rests on what constitutes journalism and who is able to benefit from Constitutional protections over the freedom of the press.
"Can anyone who posts a blog be considered a reporter?" Associate Justice Carol Ann Conboy asked Eggleton; who replied affirmatively that "The test is whether the person has an intention to gather, analyze and disseminate," and contended that this "is a reasonable standard and Implode Explode meets that standard."
MSI came to the attention of Implode-Explode after an investigation by banking authorities in Massachusetts and New Hampshire for a variety of alleged violations, which ultimately required MSI to pay a fine of $725,000 and to open old files for further review.
For its part, MSI contends that its confidential internal documents were improperly leaked to the New Hampshire Banking Department.
While the court has not yet made a final ruling, some observers believe that it could remand the case back to the lower court, asking for clarification on several specific points of law and that the case could be wide-reaching and precedent setting.
"As we are moving online and our journalism is going online," Assistant Director of the Citizen Media Law Project and Fellow at the Berkman Center for Internet & Society at Harvard, Sam Bayard, said. "This could have a big impact."