Nov 1 (Reuters) - A Massachusetts couple subjected by

eBay employees to a bizarre harassment campaign after an online

newsletter they published drew the ire of executives can seek

punitive damages on some of their claims against the company,

though not some of the "most distressing" ones, a federal judge

ruled on Friday.

The ruling by U.S. District Judge Patti Saris in Boston

sought to clear up a legal question that the e-commerce

company's lawyers said had been a sticking point in talks to

settle the lawsuit by David and Ina Steiner, who it said were

already seeking more than $12 million in economic damages.

Lawyers for the Steiners and eBay did not immediately

respond to requests for comment.

Seven former eBay workers have pleaded guilty and received

sentences of as high as 57 months in prison for their roles in

an extensive campaign that took place in 2019 that involved

sending the Steiners cockroaches, fly larvae and a bloody

Halloween pig mask, and surveilling their home in Natick,

Massachusetts.

Prosecutors say the employees did so in order to silence

them after senior executives deemed the Steiners' newsletter,

EcommerceBytes, critical of eBay.

The San Jose, California-based company agreed in January to

pay $3 million under a deferred prosecution agreement. But the

company and some ex-eBay executives and employees remain

defendants in a separate civil lawsuit by the Steiners.

During a hearing in July, a lawyer for eBay, Jack Pirozzolo

of Sidley Austin, had told Saris that the company was seeking to

settle the case but that it had become clear during discussions

that they needed guidance from the judge on whether Steiners

were entitled to seek punitive damages.

Under Massachusetts law, the Steiners would not be entitled

to seek punitive damages against eBay. But the Steiners'

lawyers, led by Andrew Finkelstein of Finkelstein & Partners,

argued California law should apply to their damages claim.

Saris on Friday concluded the "most distressing conduct"

underlying the Steiners' claims of trespass, false imprisonment,

and Massachusetts Civil Rights Act violations occurred in

Massachusetts, foreclosing the availability of punitive damages.

Those claims concerned actions by eBay employees who

traveled to Natick to engage in surveillance of the couple and

vandalism of their property, which the Steiners said exacerbated

their fear for personal safety.

But Saris said the couple's other claims of intentional

infliction of emotional distress and civil conspiracy covered

not just the stalking and surveillance but also a broader range

of conduct that was carried out online from eBay's ( EBAY ) California

headquarters.

"California's countervailing interest in deterring such

malicious and extreme conduct by its corporate domiciles

prevails since the most significant of the unlawful conduct took

place within its borders," Saris wrote.

The case is Steiner v. eBay Inc ( EBAY ), U.S. District Court,

District of Massachusetts, No. 21-cv-11181.

For the Steiners: Andrew Finkelstein of Finkelstein &

Partners

For eBay: Jack Pirozzolo of Sidley Austin

(Reporting by Nate Raymond in Boston)