Multivision’s Nazerali wants Overstock kept on hook
Multivision Communications Corp.’s Aly Nazerali is fighting a no-evidence motion from Overstock, one of the defendants in his defamation trial against the Deep Capture website. Overstock says it is not vicariously liable for material published by its CEO.
ALY NAZERALI, the plaintiff in a defamation trial against the Deep Capture website, spent Thursday morning fighting a no-evidence motion brought by one of the defendants, on-line retailer Overstock.com Inc. The CEO and founder of Overstock is Patrick Byrne, who publishes Deep Capture and is another defendant in the trial. Overstock says there is no evidence that it had anything to do with what Mr. Byrne published on Deep Capture about Mr. Nazerali. Mr. Nazerali’s lawyer countered today that Mr. Byrne is “essentially the face of Overstock” and should be held vicariously liable.
Mr. Nazerali’s complaint arose from a series of 21 chapters that appeared on Deep Capture in 2011. He says the chapters falsely accuse him of associating with terrorists, market manipulators and other nefarious types. Mark Mitchell, who wrote the chapters, is another defendant in the case.
Mr. Nazerali is represented by Dan Burnett. Roger McConchie represents all of the defendants except Over--- stock, which is represented by Stephen Schachter.
Thursday morning brought Mr. Burnett’s response to a no-evidence motion filed by Mr. Schachter to have the claims against Overstock dismissed. Mr. Schachter argued yesterday that Mr. Burnett brought no admissible evidence against Overstock during the trial and did not even try to gather evidence before the trial by conducting pretrial interviews with any Overstock representatives. He also cited cases relating to when an employer can be held vicariously liable for the conduct of an employee, such as when the “conduct [was] authorized by the employer.” As well, he pointed out that the defendants represented by Mr. McConchie are not fighting the no-evidence motion, so the common problem of apportionment — when defendants bicker over who gets how much blame — does not exist.
In response, Mr. Burnett strongly disagreed that there was no evidence against Overstock. He drew attention to Mr. Byrne’s documented use of his Overstock e-mail account when contacting Mr. Mitchell or posting about Mr. Nazerali on-line. Other e-mail exchanges between Overstock employees and Mr. Mitchell showed that Mr. Mitchell did not have to organize or pay for the trips he took on Deep Capture business. As well, Overstock itself described Deep Capture as a “related company” in board meetings. All this “is absolutely enough to defeat the no-evidence motion,” concluded Mr. Burnett.
Mr. Burnett also brought up apportionment, and said the issue should not be brushed aside as easily as Mr. Schachter would like. “In this case, it’s no surprise that the defendants don’t point fingers at each other. That would be a bad tactic,” said Mr. Burnett. He suggested that Mr. Mitchell, for example, may have an incentive to let all the blame fall on him so he could protect Mr. Byrne, his “boss and benefactor.” Regardless, continued Mr. Burnett, no-evidence motions are not supposed to be granted when there are multiple defendants, so Mr. Schachter’s motion could be dismissed on that basis alone.
Mr. Burnett next turned to the vicarious liability of employers for actions by employees. One memorable case he cited had to do with an employer being found vicariously liable for sexual abuse committed by one of its employees. The case ultimately went to the Supreme Court of Canada. Mr. Burnett said the Supreme Court’s decision overturned the previous test for determining vicarious liability, which was essentially to ask whether the employer authorized the employee’s actions. The new approach, explained Mr. Burnett, is to ask “whether the enterprise created a potential for abuse.” He went on to say that Mr. Byrne would have even more room to abuse his power than a normal employee of Overstock because he is the CEO.
Lastly, Mr. Burnett considered possible solutions to some of the problems that Mr. Schachter had presented, such as the lack of pretrial interviews with Overstock representatives. He suggested that Mr. Byrne’s pretrial interviews could be considered interviews with an Overstock representative. He also suggested that the case could be reopened, not to gather new evidence against Overstock, but to bring Mr. Byrne and Mr. Mitchell in to authenticate the existing evidence and strengthen his case.
Mr. Schachter, rising to respond, repeated that nothing he had seen was admissible evidence against Overstock. Mr. Byrne’s use of his Overstock e-mail “offers nothing in the way of implication against Overstock as a party that did anything,” he argued. Fur-
ther, just because Mr. Byrne is Overstock’s CEO, it does not mean that “Overstock is therefore publishing or causing these publications to be made.”
As for Mr. Mitchell’s travel expenses, there is no proof that Overstock paid for them, said Mr. Schachter. He pointed out that in a pretrial interview, Mr. Byrne said he paid for the trips through his own personal company. Mr. McConchie had wanted that section of the interview to be read aloud in court, but Mr. Burnett was not required to do so, said Mr. Schachter.
Turning to Overstock’s acknowledgement of Deep Capture as a related party, Mr. Schachter said Overstock considers “thousands of sites” to be related parties, including Google. If someone visits those sites and clicks on a link to Overstock, Overstock makes a payment — hence the relationship. Mr. Schachter concluded, “Overstock is no different vis-a-vis Deep Capture as its vis-a-vis Google ... [or] thousands of other sites on similar commercial terms.” (Mr. Burnett would later disagree, pointing out that one advertisement explicitly stated, “You can support Deep Capture by clicking on Overstock here.”)
Mr. Schachter did not care for any of the solutions that Mr. Burnett had proposed. Mr. Byrne’s pretrial interview was personal and cannot suddenly be taken as an interview of an Overstock representative, he said. He also did not like the idea of reopening the trial, saying that would go be- yond the court’s authority and would be “prejudicial” to Overstock.
After hearing the arguments for and against the no-evidence motion, the judge said he would take time to consider them. The trial was adjourned until Friday morning.
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