No Pseudonymity in Crypto Scam Case, Despite Alleged Death Threat Against Plaintiff

From today's order by Magistrate Judge Kathryn Starnella in Y.S. v. Doe (D. Colo.):

This case involves a cryptocurrency transaction wherein Plaintiff transferred approximately $100,000.00 in digital currency to various unknown individuals, who allegedly later blocked Plaintiff's requested withdrawals and absconded with the remaining funds….

"Lawsuits are public events." "Courts are public institutions which exist for the public to serve the public interest" and "secret court proceedings are anathema to a free society." Therefore, "[o]rdinarily, those using the courts must be prepared to accept the public scrutiny that is an inherent part of public trials." The Federal Rules of Civil Procedure contemplate the naming of the parties. Rule 10(a) requires that a complaint "name all the parties," and Rule 17(a) requires the prosecution of an action "in the name of the real party in interest." …

Plaintiff asks the Court to proceed pseudonymously in this litigation because he received a death threat from an unidentified individual who is, at least in part, allegedly responsible for the underlying cryptocurrency scam. The text message exchange indicates this individual told Plaintiff, "I'm going to send a hitman after you!" and that "[he] just contacted the hitman, [the hitman] checked [Plaintiff's] address" and the hitman would "find [Plaintiff] before 12 o'clock tomorrow[.]" The individual further stated the hitman would kill Plaintiff, and informed Plaintiff he knew his home address. This exchange occurred after Plaintiff confronted the individual about the alleged fraudulent crypto scheme that gives rise to this suit…

[But] unlike [past cases that allowed pseudonymity] where the litigants faced harassment from community members, the threat Plaintiff received came from one of the unidentified John Doe defendants "following Plaintiff's confrontation of the perpetrator regarding the theft of funds and possible identity fraud." In essence, Plaintiff seeks to conceal his identity from the individuals he has sued. Plaintiff's request to proceed pseudonymously will not provide the relief he seeks, namely protection from further threats from the John Doe defendants. The John Doe defendants Plaintiff has sued are apparently already aware of his identity and address. While Plaintiff contends that "[p]roceeding pseudonymously is … necessary to prevent further targeting or harm," the Court disagrees. The proverbial cat is already out of the bag; at least one of the John Doe defendants apparently has the information Plaintiff seeks to conceal. Therefore, the Court is disinclined to allow Plaintiff to proceed pseudonymously.

To the extent Plaintiff is concerned that the John Doe defendants will improperly use and distribute his identifying information, Plaintiff may file a motion for an order that limits the John Doe defendants' use and dissemination of the information already in their possession. Plaintiff may file that motion once the John Doe defendants have been identified and served process….

Comments

[ReaderY]

The defendants know his identity. But do they know he is suing them? The court doesn’t address that issue. If this was a scam with multiple victims, then knowing plaintiff’s identity alone wouldn’t be enough to know that he was the plaintiff in this suit. I think this would make the judge’s reasoning insufficient to establish that pseudonymity would be of no benefit.

[Davy C]

But when the defendant doesn't even know the identity of the plaintiff, that's a huge disadvantage. There are all sorts of issues you might not know you could raise because you don't know who is suing you. Maybe there are jurisdiction issues because the plaintiff lives in Arizona nine months per year. Maybe the plaintiff is the judge's first cousin. Who knows?

[ReaderY]

We could easily ban automobiles as inherently dangerous. But we don’t. Applying a single principle perfectly would cost society too much. Instead, we impose a speed limit and allow them up to the limit.

The situation here is similar. There is a legal standard, like a speed limit, identifying when danger to the plaintiff outweighs the public’s and the defendant’s needs. I’m not so sure the judge here applied that standard correctly.

[Davy C]

I would argue that the defendant's needs (and due process rights) *always* necessitate knowing the plaintiff's identity.

To answer your previous question: since the plaintiff has not yet named the defendants (he seeks to learn their identities in discovery) it's likely they do *not* know plaintiff is suing them at this time. I would not be totally adverse to *temporary* pseudonymity while this discovery is ongoing, as it can't really disadvantage the defendants before they've joined the case.

[ReaderY]

So there’s just no recourse against a defendant who e.g. threatens to kill anyone who sues him? You’re entitled to your opinion. But our jurisprudence has simply never placed defendants’ rights that high.

Also, there are whole classes of cases where the identity of the plaintiff doesn’t really make any difference to the defendant. For example, when someone sues the government claiming a law is unconstitutional where the only issues are pure questions of law, who the plaintiff is doesn’t make any difference. In these cases, it’s the public’s interest in what happens in courts, not the defendant’s interest, that counterbalances the plaintiff’s desire for anonymity.

[Davy C]

If someone threatens to kill me if I go to the police and report that they robbed me, that threat doesn't mean I get to press robbery charges without revealing my identity. Although it's unfortunate that anyone should have to take such a risk, it's necessary to have a fair trial. (There's no explicit constitutional language giving the right to face anyone giving testimony in a civil trial like there is in a criminal trial, granted.)

In a case like this where the death threat was to a specific person and not to the public at large, I'm not sure how much we can trust an ex parte claim that death threats were in fact made by the defendant. The defendant wouldn't be able to really examine the evidence, since that would identify the plaintiff.

In cases where someone is suing about an unconstitutional law, I would presume they would ordinarily not have their identity hidden from the defendant (the government), just from the public. I am not sure there are federal cases where there are *only* pure questions of law. At the very least there's always going to be some factual question related to standing, right?

Yes, there's *also* the public's right to know what happens in court.