• September 14, 2016

400px-Scream_crosathorianImagine intentionally alarming the public with fabricated dangers of a company’s life-saving medical devices in the hope that the company’s share price will fall and you will make massive profits by placing bets on the company’s falling share price.

This is, in fact, what St. Jude Medical has accused “short-seller,” Muddy Waters Consulting (“MW”) of having done in a recently filed lawsuit in the U.S. District Court (D. Minn.) assigned to U.S. District Court Judge Donovan W. Frank. Appalling?

On the other hand, in a democratic society that cherishes free speech, we have to be on guard against large companies, with the power to rain down multi-millions of dollars of legal fees, trying to obliterate critics or silence the bearers of low opinions or bad news.

The recently filed St. Jude case will be an interesting one to follow. St. Jude is represented by some of the best lawyers in the United States. We will see who the defendants are able to line up to fight them.

Will MW bring a motion to dismiss based on our “anti-SLAPP” statute? That is, will defendants argue that they were engaged in constitutionally protected “public participation” and that St. Jude is trying to kill the messenger?

This is serious high-stakes business for St. Jude Medical, which is fighting back both in court and in public relations. Computer forensics expert, Mark Lanterman of Computer Forensic Services  [ed. note/full disclosure: a Minnesota Litigator sponsor] , is reported to have said that there is “not much meat on the bone” of MW’s claims (that MW made through its related entity MedSec).

In an unrelated defamation suit, Mr. Charles M. Bolton recently learned that he could not avoid being a defendant in a defamation lawsuit by claiming that his on-line blog ranting against an ex-girlfriend was constitutionally protected “public participation.

There is no question that we have and must have limits to “free speech.”

St. Jude Medical’s 33-page complaint is a very well written indictment of MW and the people behind it. I see dark clouds ahead over muddy waters. This is just the beginning, of course, of what might be an arduous and very long campaign. Anyone who follows civil litigation knows that initial impressions can prove inaccurate over time.



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