When does the president of a corporation have to get his own coffee?
When he and his business partner are the only employees.
“In a startup like ours, there’s two employees, so we do everything,” says Chris Moser, president of Network 54, an Internet service which hosts message boards, blogs, chat rooms, and other online communities.
“We do the finances, we act as the CFO, we act as marketing, we do the programming, we run the servers, we do everything that’s involved in running the business.”
Chris’ site gets about 5 million visitors a month, so there’s plenty to keep him and his partner busy – including a lawsuit.
“We had some legal papers arrive at our office that was a lawsuit for $800 million dollars,” says Chris. “It was a little bit shocking to get it.”
“We were being sued for libel and slander and defamation and conspiracy by a strawberry farmer in Florida,” he says. “He found us out by finding a message posted about him on one of our message boards. We heard nothing from him and he basically sued us right off the bat.”
It turned out that the lawsuit against Chris was related to another lawsuit the farmer had filed.
“He was involved in a lawsuit against the German National Bank trying to collect on these pre-World War II gold bonds that they had been collecting and buying off of various sources.”
“Someone else posted a message on our site that allegedly defamed him,” says Chris. “When this message was posted on our system, I don’t know if he Googled it, I don’t know how he came to find it, but somehow he found this message about himself on our Internet site – a forum that was hosted by us.”
“Allegedly we were conspiring to slander him to affect the outcome of his other suit. He thought that we were involved in a conspiracy with the German National Bank, Commerce Bank, John Hancock Insurance, and a few other entities.”
“It was unbelievable. Just the context of the case was outrageous. It was just out there. It was like a drive-by lawsuit almost.”
“We needed to get representation both in California to respond immediately and in Florida,” Chris says. “We knew that the law was on our side and that was probably the best thing going into it.”
It took about five months, but eventually the plaintiff dropped his case against Network 54.
“At the end of it all, it just was a lot of time and a lot of money spent on something that was completely unnecessary.”
“Time is the most valuable thing you have when you’re running a business and to have something like this take away your time, really it’s taking away the most important thing you have to run a business.”
Chris has learned a few lessons from the experience.
“You realize that you might have to spend money on something that’s completely unnecessary. My business partner put it as a cost of doing business. It seems silly that we are the ones that have to pay for someone else’s shot at maybe making a lot of money.”
“You could be right on the law and you could still be in jeopardy,” says Chris. “That doesn’t stop people from suing you and involving you in the cost of defending yourself from a lawsuit.”
“This was somebody’s shot at getting rich. We defended ourselves and did it successfully. It could happen to anybody,” he says, “and you might not be able to defend yourself. What do you do then? You would have to shut down your business or you’d have to take money you’d put elsewhere and your time and put it towards the lawsuit.”
“I’m not sure what can be done except for harsher penalties on attorneys that bring these kinds of frivolous lawsuits against people,” says Chris. “It’s gaming the system. Trying to game the system for your own personal profit is probably something that should be looked into.”