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U.S. Foodservice May Sue Web Site

March 14, 2003

BALTIMORE (AP) _ U.S. Foodservice is threatening legal action against the operator of a Web site where food-service employees often exchange news and gossip about the company’s recent accounting scandal.

The move comes as the Columbia-based company tries to defend its image following an announcement by its Dutch parent, Royal Ahold NV, that U.S. Foodservice overstated 2001 and 2002 earnings by at least $500 million.

A federal grand jury in Manhattan and the Securities and Exchange Commission are investigating the nation’s second-largest institutional food distributor.

Web site operator Steve Hoschler, an industry veteran who is now a fifth-grade teacher in Sacramento, Calif., said he has temporarily shut down ``news and comment″ section on the Web site and is seeking legal help.

``I immediately complied with everything they asked me to do,″ said Hoschler, who added that he believes the law is on his side.

In a letter to Hoschler, a lawyer for U.S. Foodservice said Hoschler could be held liable for what the company called ``false and defamatory″ statements posted on the Web site. The letter suggested Hoschler crossed the line by asking company employees to share confidential information.

``It is reprehensible for you to importune USF’s employees to, perhaps unwittingly, engage in wrongful conduct against the company by soliciting this information,″ wrote Baltimore attorney Robert Brennen.

A spokesman for Royal Ahold said U.S. Foodservice was acting on its own. U.S. Foodservice referred questions to Brennen.

Hoschler’s Web site, foodservicerumors.com, has become popular among the employees, executives, brokers and vendors who work in the foodservice industry.

Contributors post news, rumors and, occasionally, internal memos sent to U.S. Foodservice employees. In one example, Hoschler posted a memo that instructed U.S. Foodservice employees not to talk to the media.

Hoschler said he screened the e-mails, removing any he thought were vicious individual attacks or contained offensive remarks.

Legal experts said courts have consistently ruled in favor of online operators of message boards.

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