Eagle Sues Internet Posters

The California Superior Court issued a ruling late last week allowing discovery to proceed in Eagle's case against Internet posters

March 14, 2006

2 Min Read

HOUSTON -- Eagle Broadband, Inc. (AMEX:EAG), a leading provider of broadband, Internet protocol (IP) and communications technology and services, announced today that the California Superior Court of Santa Clara County issued a ruling late last week allowing discovery to proceed in Eagle Broadband's case against Internet posters that Eagle believes are engaging in manipulative stock trading activities.

Eagle Broadband has alleged that these Internet posters have intentionally posted false information on the Yahoo! Finance message board in an effort to drive down the value of Eagle's stock price. In response to the complaint, four of the anonymous Internet posters filed motions to strike or dismiss the complaint as constitutionally protected speech on a matter of public interest under California's anti-SLAPP statute. On March 9, the Honorable William J. Elfving of the California Superior Court of Santa Clara County issued a ruling allowing discovery in the case to go forward with respect to two of the posters, known as DOE 2 and DOE 3, and ruling as a matter of law that Eagle had met its legal burden of establishing a prima facie case against a third poster, known as DOE 4, under the California's Anti-SLAPP law.

Judge Elfving wrote in the ruling, "The declaration of Deirdre A. Flaherty contains admissible evidence that Eagle's stock value and business suffered from DOE 4's fake press release and other false and misleading messages that were posted on the Eagle MB from January 1, 2005 through October 31, 2005. Accordingly, DOE 4's special motion to strike is denied."

David Micek, Eagle's President and CEO, said, "This is an important win for Eagle's loyal shareholders, but not an unexpected one. While Eagle fully respects the constitutional rights protected by California's anti-SLAPP statute, the Court's ruling is an acknowledgment that these Internet posters have simply gone too far."

Eagle Broadband (Amex: EAG)

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