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America Online, Inc. v. Nam Tai Electronics, Inc.

Record No. 012761 (Va. Sup. Ct., November 1, 2002)

Affirming the decision of the court below, the Virginia Supreme Court denies America Online's ("AOL") motion to quash, and directs AOL to comply with a subpoena duces tecum seeking information as to the identity of an individual who anonymously posted derogatory comments in an online message board about Nam Tai Electronics, Inc. ("Nam Tai"). The subpoena in question was issued by the Virginia courts in aid of a proceeding pending in the courts of the State of California, in which proceeding Nam Tai alleged that the anonymous Internet poster had violated California's Unfair Business Practice statutes.  The Virginia Supreme Court determined that comity should be accorded the decision of the California court directing the issuance of the subpoena In reaching this result, the court rejected AOL's claim that First Amendment concerns barred Nam Tai from obtaining the information in question.

Nam Tai commenced a John Doe action in the state courts of California arising out of the anonymous posting by the defendants of various derogatory statements about Nam Tai in an Internet message board devoted to a discussion of plaintiff's stock.  The message board was maintained by Yahoo.  Nam Tai's complaint included claims under California Business and Professions Code Section 17000 et seq., California's unfair business practice statutes.

One of the postings at issue was made by an individual who went by the screen name "scovey2."  Nam Tai issued a subpoena to Yahoo for information pertaining to scovey2's identity.  Yahoo responded with information that indicated that the individual had an e-mail account with AOL, and that one of the postings in question was made from an IP address assigned to AOL.

Nam Tai thereafter sought leave to serve a subpoena duces tecum seeking information concerning the identity of "scovey2" on the non-party AOL, which has its principal place of business in Virginia.  The California state court issued an order, which in turn resulted in the issuance of the subpoena duces tecum at issue by the Virginia courts.

AOL moved before the Virginia trial court to quash the subpoena, arguing in part that the subpoena would "infringe on well-established First Amendment right[s] to speak anonymously."  Nam Tai asked the trial court to accord comity to the order of the California court, and uphold the subpoena in question.  Holding that it could not resolve the issue of comity without further guidance from the California trial court as to the basis for its decision, the Virginia court requested such further guidance from the California trial court.

The California trial court responded with an order, reaffirming its prior determination that Nam Tai was allowed to proceed with the requested discovery.  In this decision, the California court held that Nam Tai had alleged sufficient facts in support of its claims to be entitled to proceed with the requested discovery, notwithstanding the First Amendment arguments advanced by AOL.  In reaching this result, the California trial court reviewed the papers submitted by the parties, including AOL, to the Virginia trial court in connection with the motion to quash.

The Virginia trial court subsequently issued an opinion, according comity to the decision of the California state court, and denying AOL's motion to quash.  On this appeal, the Virginia Supreme Court affirmed that determination, and directed AOL to comply with the subpoena in question.

Under Virginia law:

Before affording comity to an order of a foreign court, first the foreign court must have personal and subject matter jurisdiction to enforce its order within its own judicatory domain.  Second, the procedural and substantive law applied by the foreign court must be reasonably comparable to that of Virginia.  Third, the foreign court's order must not have been falsely or fraudulently obtained.  And, fourth, enforcement of the foreign court's order must not be contrary to the public policy of Virginia, or prejudice the rights of Virginia or her citizens.

The court held that when analyzed under these standards, the order of the California court was entitled to comity, particularly in light of the clarifying order issued by that court.  In reaching this conclusion, the court rejected AOL's argument that the potential inability of the California to assert jurisdiction over the unknown defendant barred the court from according comity to the California court's decision.  "[B]ecause the procedural requirements for maintaining suits against unknown defendants in California are reasonably comparable to those in Virginia in the context of the present case, we hold that comity is not barred on that ground."

The court also rejected AOL's argument that the California court's order should not be honored because it was the result of an ex parte proceeding, and not a full fledged adversarial contest.  Because the California court had reconsidered its determination in light of AOL's motion to quash, and had reviewed the papers submitted by AOL in support therewith, the Virginia court was satisfied with the procedures which resulted in the issuance of the order in question.

Finally, the court held that the Unfair Business Practice statutes of California, and the California court's determination that the First Amendment concerns raised by AOL were outweighed by the need to permit Nam Tai to discover the identity of the defendant, were sufficiently comparable to the law of Virginia to permit the court to accord comity to the decision of the California trial court.

The Virginia Supreme Court accordingly held that "the trial court did not abuse its discretion in concluding that the California court's commission for out-of-state discovery was entitled to comity, and, thus, properly denied AOL's motion to quash …".

The full text of the court's decision can be found on a website maintained by Virginia's Judicial System.

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