This is the most pathetic thing I’ve seen in a long time. Herbalife (NYSE:HLF), the $4.7B company, is going after a twitter user with 82 -- yes, 82 -- followers. The reason? This person’s tweets have “defamatory, disparaging, and deceptive posts about Herbalife and its products, but also contains numerous insulting and offensive statements about Herbalife’s management team, its members, and even federal regulators”.
Why is this so pathetic? Well, Bill Ackman who runs the $12B hedge fund Pershing Square has called HLF CEO Micheal Johnson “a criminal”, he has said the rest of management are “criminals” also. He has called the company a “fraud”, “a criminal enterprise”, “a pyramid scheme” and countless other defamatory, disparaging and deceptive (according the HLF) statements. He even has a website -- Herbalife Pyramid Scheme -- devoted to trying to destroy the company. Still, other than the occasional snark from management, they have taken no action against him.
Ackman has even gone so far as to practically beg Herbalife to commence legal action against him and his claims. But, nothing from Herbalife. When asked point blank if he was worried about legal action from Herbalife, his response? “I’d welcome it”. Why has Herbalife left Ackman alone?
Proceeding against Ackman is something the company is terrified to do. Why? Well, they’d have to prove his allegations were false and that would involve discovery. Discovery is the last thing this company wants against a deep pocketed adversary. By picking on some small time twitter user who most likely does not have the cash to even begin to defend themselves against the legal firepower of a $4.75B company, Herbalife can silence them. THAT would put a chill on other twitter users expressing their negative opinions about the company and who do not want to run into a load of legal bills.
Is Herbalife simply doing this in an attempt to squash negative twitter sentiment about them? If so, then this case has much larger 1st amendment ramifications.
Things might get really fun here should someone step in and decide to bankroll this person’s legal bills. Does Herbalife back down? Do they press it?
Let’s be honest, if this person stood in the middle of Times Square and said the things about Herbalife they have tweeted they would reach more people daily that they do with their twitter feed. The insinuation HLF and its reputation is being “materially harmed” by anything that twitter feed produces vs the 2-year war Ackman has waged against it is beyond laughable on its face a seriously delusional on a deeper level.
Were they going after Ackman also, I’d say this action is just another in a series of legal confrontations the company has embarked on. But they haven’t so this isn’t. They are trying to bully someone into shutting up.
I don’t think this has anything to do with what this person tweeted and much more about shutting down negative twitter opinion about HLF.
Reuters:
Herbalife Ltd (HLF.N) filed a petition seeking information from micro-blogging company Twitter (NYSE:TWTR) to identify an anonymous user who posted defamatory tweets against the weight-loss and nutritional products maker.
The petition for “discovery before suit” seeks to identify the person against whom a lawsuit can be filed.
Herbalife said it wants Twitter to provide information such as IP addresses and account details of the user who vilified the company and its management as “thieves, pill pushing frauds and bullies”.
“The twitter feed of @AfueraHerbaLIES contains not only defamatory, disparaging, and deceptive posts about Herbalife and its products, but also contains numerous insulting and offensive statements about Herbalife’s management team, its members, and even federal regulators,” the company said in the petition filed on Monday in Illinois.
Herbalife said the user’s tweets, accusing it of selling toxic and unregulated products, prejudice the company in its trade and are materially harmful to its reputation.
The company wants the court to order Twitter to preserve all information relating to the matter and also allow Herbalife to serve discovery upon Twitter, including document production requests.
Twitter’s privacy policy requires a court order before the company releases information about its users.
“This is pretty straightforward. We are not going to sit back and let someone make false and defamatory statements about our company,” said Alan Hoffman, a representative for Herbalife.
Reuters could not immediately reach Twitter for comment outside regular U.S. business hours.
Billionaire investor William Ackman has long accused Herbalife of being a fraud, claiming the company runs a pyramid scheme in which participants earn more money by recruiting others to sell the company’s products than they do by selling the product. Herbalife has denied those allegations.
The case is in the Circuit Court of Cook County, Illinois; Herbalife International of America Inc. v. Twitter Inc.