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Newsletter Publisher Won't Reveal Subscriber List

The publisher of a financial newsletter told Maryland's second highest court Wednesday that he should not be forced to disclose his subscriber list and other information sought by an Arizona company seeking those it says made defamatory online comments.

The publisher, Timothy M. Mulligan (search), told the judges "almost everything we publish could potentially be subpoenaed," putting him in the position of constantly appearing for depositions if his request to quash a subpoena by the Arizona drug company, Matrixx Initiatives, is denied.

The judges, however, appeared to side with Matrixx, repeatedly asking why Mulligan should not appear for the deposition and invoke his right not to reveal his subscribers and sources under Maryland's so-called "Shield Law," which protects the rights of the press.

"My sense is it didn't go well," Mulligan said after the hearing. "It's not clear yet, but it will probably be in litigation for years because I have no intention of giving up my sources or subscribers."

After the hearing, Matrixx attorney David Tobin said "no one has the right to make defamatory comments. That is not protected speech."

Internet postings have become the subject of a number of court battles, especially in cases where they have affected the stock prices of companies. Free speech advocates have also become involved and the issue has even entered the political arena in Maryland.

Joseph F. Steffen Jr., (search) a former aide to Republican Gov. Robert L. Ehrlich Jr., (search) resigned last winter after it was revealed that he had posted rumors about Baltimore Mayor Martin O'Malley's (search) personal life on Internet chat sites. O'Malley is seeking the Democratic nomination for governor and would face Ehrlich in the general election if he wins.

Tobin told the court it was unclear whether Mulligan could invoke the shield law.

"That's the white elephant in the room," the Matrixx attorney told the judges.

Mulligan said appearing constantly for depositions could hamper his ability to make a living, especially since his newsletter reports on questionable accounting practices by companies. The judges later asked Tobin how many depositions Mulligan would have to sit through.

"Hopefully, one," Tobin responded.

In response to the first subpoena by Matrixx, Mulligan two years ago turned over nearly 400 pages of documents, which he said was mainly source material for his report. He has refused to comply with a second subpoena seeking, among other things, his subscriber list and any contacts with an anonymous poster to Internet messages boards known as "TheTruthseeker."

However, Montgomery County Circuit Judge Eric M. Johnson denied Mulligan's request to quash the second subpoena and Mulligan appealed to the Court of Special Appeals.

Matrixx claims the postings are part of a scheme to drive down the company's stock, benefiting traders who sell short, or borrow shares and repay them at a later time, hopefully when the price has dropped.

The company filed a defamation lawsuit in Arizona in 2002, naming two dozen John and Jane Does as defendants. Matrixx has also been battling lawsuits claiming its Zicam Cold Remedy (search) nasal gel causes permanent loss of smell and taste.

Mulligan has said he doesn't know the anonymous posters and doesn't think he should answer further questions. He is fighting the subpoena with the help of the American Civil Liberties Union, the Electronic Privacy Information Center, Public Citizen and other advocacy groups

Tobin, however, said the issue was merely one of discovery, the legal method of obtaining the facts in a dispute and not a precedent-setting First Amendment case.

The company "simply wants to know what Mr. Mulligan might know" about the online postings, Tobin said.