While Justin Kurtz, 21, (pictured) was asleep at his apartment, his car was towed. The next day, he found it with the T&J Towing Company.
At the towing lot, he carefully inspected his car. It's a machine Kurtz knows well -- when he's not training to be a pilot at Western Michigan University, he spends some time working on that car. He noticed a few things were funny: His alarm had been reset and his adhesive parking pass was mostly scraped off the inside of his windshield.
Kurtz said he knew his car had been broken into and the pass ripped off in order for it to be legally towed. He filed a police report and nothing came of it. He said he knew the company wouldn't help him. Taking matters into his own hands, the college junior started a Facebook group called "Kalamazoo Residents Against T&J Towing Company."
"I was basically seeing if it happened to anyone else," Kurtz said.
And that's why Kurtz was served his summons for libel on April 9 for $750,000 by the T&J Towing Company.
After starting the group, a local news station interviewed Kurtz about his story. Then in February Joseph Bird, the owner of T&J, threatened to sue Kurtz unless he took the group down. Bird claimed that because of the page, he was losing customers. Two months later, he sued Kurtz for "libelous and slanderous claims."
Regarding why he was charged with libel, Kurtz believes that Bird and company were attempting to silence him.
"His true motivation is to suppress truthful public discussion of his unlawful and unethical business practices," reads the nine-page response to T&J's lawsuit. (T&J Towing did not return calls from Money College for comment.)
Kurtz said he didn't think T&J would take action in such a way. And almost as certainly, Amanda Bonnen from Chicago didn't think Horizon Realty Group would sue her for libel because of Twitter. The offending tweet to her friend read, "Who said sleeping in a moldy apartment was bad for you? Horizon Realty thinks it's okay."
Leslie Reis, the director of the John Marshall Law School's Center for Information Technology and Privacy Law, took the case pro bono, meaning Bonnen didn't have to pay for Reis' services because the case was a rarity. It was the first Twitter-based libel case in Chicago.
The case was thrown out in January. The judge found the message too vague.
But just because Bonnen's case was thrown out doesn't mean Reis thinks Twitter users are immune to lawsuits like this.
"Defamation is defamation regardless of what the vehicle for expression happens to be," Reis said.
When the media picked up Bonnen's story, it was commonly mentioned that Bonnen only had a few followers. What's more, since she was tweeting it to somebody else, it was unlikely that more than a few people would even read the tweet. It wasn't until the lawsuit was heavily reported on when the general public knew of Bonnen's statement.
A similar thing could be said for Kurtz. His group had a few members, but after his story was picked up by CNN and other media outlets, his Facebook group's membership numbers skyrocketed.
"The group had really slowed down in the two months in between when he first threatened to sue me and when he actually sued me," Kurtz said. "Since that has happened, the group has tripled and it's gone worldwide-- people from all over Hong Kong, Lebanon, Germany, all sorts of stuff."
Rebecca Jeschke, the media relations director for the Electronic Frontier Foundation (EFF), said there was a term for that type of response.
"It's called 'the Streisand Effect,'" Jeschke said. "Barbra Streisand tried to get an aerial photo of her house blocked off the Internet and promptly got it all over the Internet in the battle over it."
After the media coverage came, people started dropping accounts from T&J. The company's lawyer said it was the Facebook page's fault. Kurtz said the media coverage is what really shed a light on the company's lawsuit and Kurtz' group.
"You realize that by suing somebody, you're just going to be bringing more attention to whatever they're saying," said Darren Cahr, a partner with Drinker Biddle in Chicago, who specializes on new media issues.
However, Cahr said a company should still consider whether to take action if it is falsely accused of a crime or serious misconduct. "If it's something that's not true, and causing you harm, that's something you've got to deal with in one way or another," Cahr said.
Both Bonnen's and Kurtz' cases have another thread in common aside from being based on social media activity -- both were sued by companies, not individuals. James Tyre, an attorney who has handled more than 100 defamation actions in his 30 years in practice, said companies sue for libel for many reasons. Sometimes they sue when they legitimately feel they've been harmed, he said, and sometimes they sue to suppress negative speech.
"Regardless of the reason, the effect often is to call more unwanted attention to the company than if the company had just kept quiet," Tyre said in an e-mail. "In these types of situations, the collateral damage that the company brings on itself by pursuing claims under these circumstances almost always will be significantly more than the damage (if any) caused by the initial alleged libel."
Cahr said when clients come to him with a defamation complaint, he said he always asks, "Were you really damaged," and, "Is this going to just draw more attention to whatever they're claiming?"
Reis, Tyre and Cahr all said Kurtz' and Bonnen's cases outline a cautionary tale: Twitter, Facebook and other social media users need to be aware of the risks inherent to posting in a public forum. Namely, the risk of being sued for $750,000.
Tyre said that even if a lawsuit "lacks merit," it could take a lot of time and money (unless a case is taken pro bono, like Bonnen's) to get to that result.
"Everyone should know there is a risk of being sued and what that risk entails," Tyre said via e-mail. "Some people seem to think that whatever they do on the Internet is risk free. That is not the case."
"There are consequences to your online behaviors," Reis said. "You need to understand that what you post on Twitter and what you say using various social media should be considered to be a public statement regardless of whether you have 20 followers on Twitter, regardless of how many people you have on Facebook or what your privacy settings might happen to be."
In Cahr's words, it's an easy distinction. Would you like for the readership of the local paper to know what you're posting about a company?
"The lesson that should be taken from all of these cases is people need to think about who they're really talking to," Cahr said. "If it's something that you don't mind appearing on the front page of a newspaper, go ahead and say it. If it's something that you would mind seeing on the front page of a newspaper, think about who's going to read it."
How to Avoid Financial Scams
Avoid getting duped by financial scams.View Course »