Free Speech

Threat of "Social Media Stink" = Civil Extortion

So holds the Iowa Court of Appeals.

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A bit more from Hoffman v. Clark (follow the link for more details on the case, in which most of the verdict related to the libel claims):

The jury awarded Hoffmann Innovations $250,000 for its civil-extortion claim against Scott. This claim was based on Scott's statement to Hoffmann that he would make a "social media stink" if Hoffmann Innovations did not pay him a severance.

In a taped phone call of when Clark was terminated, the recording captures Clark confirming he would "go away" if he could get a severance payment. He insinuated that there might be a "public mayhem" if he were to get "pissed off." The payment would come with his "promise" he would not blow up, followed by another promise to "get off social media." On appeal, Clark argues Hoffmann "presented no evidence to support an award of damages for the claim of civil extortion." We disagree.

The jury was instructed the elements of extortion included

1. A person commits extortion if the person does any of the following with the purpose of obtaining for oneself or another anything of value, tangible or intangible, including labor or services:
a. Threatens to inflict physical injury on some person, or to commit any public offense;
b. Threatens to accuse another of a public offense;
c. Threatens to expose any person to hatred, contempt, or ridicule;
d. Threatens to harm the credit of a business or professional reputation of any person; or
e. Threatens to wrongfully injure the property of another.

Clark's only challenge to the jury instruction was, "I don't believe there's a prima facie case of extortion." Clark did not object to the form of the instruction, therefore, it becomes the law of the case. So with this instruction in mind, a jury could find Clark threatened "to expose [Hoffman] to hatred, contempt, or ridicule" and "to harm the credit of a business or professional reputation of [Hoffman and his business]." As other support of this message of threats, Clark also contacted Hoffman's business associate directing him to convince Hoffman to drop the civil case or Clark would attempt to stop the sale of the products that both Hoffman and the business associate profited from by contacting multiple governmental agencies and racing bodies.

In his own words, Clark knew he had the power to hurt a business over social media. After he was fired but before he started regularly attacking Hoffmann, Clark was in contact with Hoffmann Innovation's technical support and engineering supervisor, asking about another company that Clark believed may have copied Hoffmann's product. Clark told the supervisor, "Well, just let me know if the attorn[eys] can't do anything worthwhile. Because I could make a single post on FB about it and wipe them out. Lemme know what [Hoffmann] wants to do about it i.e. if you need the Court of Social Media." When the supervisor responded that Hoffmann was out of town, Clark responded, "I will contain my vengeance, but you let me know it's time to open a can of Fuck Them." Substantial evidence supported the attempt to extort. "[G]eneric" extortion is defined as "obtaining something of value from another with his consent induced by the wrongful use of force, fear, or threats." Scheidler v. Nat'l Org. for Women, Inc. (2003).

Note that extortion, unlike libel, isn't limited to false allegations; threatening to reveal even accurate information unless the target pays (or does something else the threatener demands) can be punishable. For more on how the law draws the line between civilly actionable (and even criminally punishable) extortion and constitutionally protected speech, see this post.

NEXT: Court Affirms >$10M Libel Verdict Against Disgruntled Ex-Employee-Turned-Competitor

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  1. What a jackass.

    1. Over and over again. The lawyer is having trouble understanding. Wrong defendant. The people causing any damage are the parties acting on the publication. That includes customers who cancel orders.

  2. It seems to me that a lot of debt collectors cross the line into extortion if the above definition is accurate.

    Just sayin....

  3. I have enormous problems with the combination of otherwise lawful action with demand for payment turning into a tort (either extortion or blackmail). I've no problems with the classic extortion "You've got a nice little shop here, be a shame if anything happened to it" but that is a threat of unlawful action.

    Of course this guy apparently did a whole lot more, and repeatedly ignoring court orders doesn't ever help.

    1. I think "for profit" element does it for me. If the allegations are truthful, then it's not a problem to publish them. In this case it seems they were not truthful since they won on the libel counts also.

      1. My former employer cheated me of most of my severance pay, when laying me off with a wife four months pregnant. (I'd have taken them to court over it, but needed a good reference to find a new job; I'd never worked anywhere else!) I tell anybody who asks what evil rat-bastards they were.

        If I had offered not to tell people I'd been cheated if they simply refrained from cheating me, it would have been extortion?

        How convenient for evil rat-bastards who have it in their power to reconsider screwing someone over, but who'd rather not.

        1. Seeem like there was more than that going on here.

          1. A bit, but isn't that the principle stated?

    2. Yeah, seems like a problem. Extortion was always supposed to be wrongful gain or gain from threats of wrongful actions, not "I'll tell the news media you steal from people if you don’t give me back the money you stole from me".

  4. Just at first glance, that's a slightly off-center instruction for Civil Extortion -- appears to recite all the elements of the state felony, but omits the affirmative defense in the statute that would establish the usual common-law element of wrongfulness.

    Mr. D.

  5. Did the defendant have a bad lawyer? At least preserve a First Amendment issue for appeal. The "hatred, contempt, or ridicule" part invites a facial challenge. (The 2017 post linked near the end lists cases.)

    1. I think the defendant was the problem.

  6. Reading the description of this case, this sounds like a classic "bad facts make for bad law" situation. On its own as presented in this post, the finding is ridiculous. "I'll complain in public about you if you don't give me the severance pay I believe I deserve" can't possibly count as extortion, standing on its own. If it was, every time a customer threatens a business with a negative public review, they would be liable for extortion, even if the complaints were true. Worse, every legal settlement which includes a non-disparagement or confidentiality clause would be tantamount to extortion.

    But reading the deeper case description, it's clear that the liable party here went way far out of his way to antagonize the court and ignore the judicial process and the judicial authority as much as he possibly could, to the extent of going on the run instead of reporting to jail to serve a sentence for criminal contempt of court.

    1. But the court could have dismissed the extortion charge and nailed him for criminal contempt.

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