Technology & Marketing Law Blog: March 2012 Archives

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March 31, 2012

Lawsuit Against Google for Putting Search Queries in Referral URLs Moves Forward – Gaos v. Google

By Venkat Balasubramani with comments from Eric

Gaos v. Google, 5:10-CV 4809 (N.D. Cal.; Mar. 29, 2012)

Gaos sued Google based on the theory that: (1) Google allows website owners (and third parties) to see what search terms a user inputted; and (2) through “reidentification,” search terms could be linked with a user’s identity. Chief Judge Ware granted Google’s motion to dismiss on Article III standing grounds in April 2011. Goas filed an amended complaint, alleging claims under the Stored Communications Act and variety of state law claims. (Here’s a link to the Amended Complaint.) In the interim, the case got reassigned to Judge Davila.

State law claims: As to the state law claims, the court again says that Gaos lacks Article III standing. She alleges only that she searched for her own name and her family names. In contrast to the allegations in Does v. AOL (the “search Valdez” case) where AOL released sensitive information—such as bank account information and social security numbers—in search queries, disclosure of Gaos’s search queries to third parties will not cause her harm. Although the court grants Google’s motion to dismiss, it grants Gaos leave to amend a second time.

Stored Communication Act claims: As to the Stored Communications Act claim, the court says that she does not need to allege any actual injury other than a violation of the statute: “injury required by Article III . . . can exist solely by virtue of ‘statutes creating legal rights, the invasion of which creates standing.” The court does not reach the merits of whether Gaos’s allegations actually state a claim under the Stored Communications Act, finding that Google’s motion “[did] not place this . . . issue before the court.” (The court cites to Fraley v. Facebook and In re Facebook Privacy Litigation and notes that the fact that Gaos has standing is distinct from whether she has stated a claim.) Instead, the court focuses on whether Gaos corrected the deficiencies identified by Judge Ware in his initial dismissal order, which found Gaos’s initial allegations conclusory in nature. The court says that Gaos corrected these deficiencies by alleging what particular search queries Google improperly disclosed.

Yikes, this is not an optimal result for Google to say the least. A dismissal of the Stored Communications Act claims on Article III grounds would have avoided the question of whether search queries are covered under the SCA, whether Google’s disclosure amounts to a violation, and Google’s possible defenses based on consent. (Contrast this result with Low v. LinkedIn, where the court grants a dismissal on Article III grounds in another referrer header case against LinkedIn.) I’m not even sure whether Google can challenge the SCA claims until summary judgment. Google will try to whittle away at the lawsuit by attacking it at the class certification stage, but plaintiff has to be pretty happy with this ruling.

A big question is how the Supreme Court’s decision in the Privacy Act case will affect the outcome here, and on this score the outlook is bleak for Gaos and other similar plaintiffs, at least as far as damages goes. (See Kash Hill’s post on that case: “Humiliation After A Privacy Invasion Is Not An 'Actual Damage,' Rules Supreme Court.”) It will come down to similarities in statutory language between the two statutes, but I would imagine Google may argue shortly that the Supreme Court’s limitation of “actual damages” to pecuniary or economic harm requires a re-examination of Gaos’s claims for damages. Gaos could still assert claims for injunctive relief, so I’m not sure this will successfully put the brakes on this lawsuit.
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Eric's Comments

I don't share Venkat's "yikes" reaction to this ruling. It seemed fairly straightforward to me. The court dismissed the bulk of Gaos' lawsuit on Article III standing grounds. This is consistent with the broad trend that most privacy "victims" lack sufficient harm to deserve a day in federal court.

The only claim that didn't get wiped out is the SCA claim, and that's only because Gaos alleged a statutory violation. This court is bound by the Ninth Circuit's opinion in the Edwards v. First American case saying (in a real estate case) that plaintiffs satisfy Article III standing when they allege statutory violations. The Edwards case is on appeal to the US Supreme Court, and based solely on the Ninth Circuit's track record in the Supreme Court, I wouldn't be surprised if the Supreme Court reverses--at which point simply alleging an SCA violation without any further harm won't survive an Article III standing challenge.

I'll also add that the SCA's poor drafting means that no one (including the judges) knows exactly what's covered by the statute, so it's not that surprising to see an SCA claim survive a motion to dismiss. As we know, virtually every privacy lawsuit alleges an ECPA/SCA violation because the statute is so murky that it could apply to anything. Obviously privacy defendants would prefer that ECPA/SCA suits get screened on Article III grounds, which is why the Edwards' SCOTUS case is of substantial interest to the Internet community.

As this case proceeds, it's going to fail for a long list of potential defects beyond the ones Venkat mentions, including statute of limitations/laches (after all, search engines have been putting search queries in the referral URL since the 1990s), searchers' consent (based on, say, disclosures in the privacy policy), and Google's "consent" as the presumptive recipient of the "communication" (the SCA lets either sender or recipient disclose the communication without permission from the other party). As Venkat notes, Google didn't raise these defenses yet. When Google advances those defenses, I see this lawsuit as unquestionably doomed--in a mockable kind of way--and the only bummer is that Google will have to spend more money to flatten this suit.

Finally, Google has made some technical changes that, in some cases, restrict its passing of search queries through referral URLs. Danny Sullivan's writeup of the issue from last Fall. I doubt the lawsuit will get that far, but if it does, I wonder if this development will take the wind out of the sails of any injunctive relief request. Note that while suppressing search queries in referral URLs might enhance individual searcher privacy, the loss of that information to publishers might ultimately degrade the overall ecosystem by hindering publishers' abilities to optimally respond to searchers' interests.

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Venkat's Surreply

After reading Eric's comments, I agree that a yikes reaction may not be warranted. Maybe this lawsuit will be swatted away in short order. I'm still curious as to how often the practice (of disclosing search queries in a way that is not sufficiently protective of user identity) occurs and whether Google has done anything to address it on the technical side. It looks like it has. This also raises the issue of whether this was mere inadvertence or something more. Feels like bad timing for bad PR on the privacy front for Google, especially when people may be looking for alternatives.

Posted by Venkat at 09:40 AM | Privacy/Security , Search Engines

March 30, 2012

What Do Soymilk and Nutella Have to Do With an Online Harassment Case?--Taylor v. Texas

By Eric Goldman

Taylor v. State, 2012 WL 955383 (Tex. App. Ct. March 22, 2012)

In service of you, the reader, I read a lot of cases to find the ones worth blogging. Inevitably, some of those cases are gross. Like this one.

"Sataya," the stage name of Scheri Couch, provides online psychic services at $3 per minute. The opinion says she claims to be a direct descendant of Jesus and Mary Magdalene. Her website now makes different dubious claims about her lineage.

The defendant, Christopher Mark Taylor, claims he wanted to test her psychic abilities before becoming a customer. To do so, Taylor sent her multiple chat messages through her website. First, Taylor sent her rude and abrupt chat messages. Then, Taylor sent some messages falsely claiming to be her hairdresser. In one, he (under the pretense of being her hairdresser) invited Couch to lunch; when she discovered the ruse after showing up at the venue, it frightened her. Taylor claimed that, as a psychic, she should have divined the ruse.

In addition to these online contacts, for reasons that still don't make sense to me, Taylor mailed Couch a "used" condom and "soiled" panties, items that he doctored up using soymilk and Nutella. Presumably, a real psychic would have divined that the items were edible, not scatological. Nevertheless, I'll never think about soymilk or Nutella the same after this. Eww.

Texas prosecuted Taylor for online harassment. The jury convicted him in 20 minutes. The judge sentenced him to 1 year confinement but suspended that and ordered community supervision. His appeal goes nowhere.

He tried to suppress the condom and panties evidence. He argued they were extraneous to the online harassment charge. The court disagrees, saying that the items can provide insight into his intent when he sent the chat messages. The court noted the risk that the evidence would prejudice the jury (it would certainly freak me out as a juror), but it nevertheless says the evidence meets the 403 relevance standards.

Defense counsel also probed Couch's bona fides as a psychic, eliciting this concession from her: "I have not been tested by an authoritative body as to my psychic abilities." Apparently this conflicted with a claim on her website that she had been "tested in the top six percent in 'ESP perception or sensories.'" The trial judge refused to admit printouts of these contradictory claims from her website. The appeals court upholds the refusal, saying that Taylor admitted to all of the key facts supporting the online harassment claim, and therefore undermining Couch's credibility on a collateral matter wouldn't change the jury's decision. The court says:

We cannot conceive how weakening Couch's credibility about the contents of her website would have affected the jury's implicit rejection of appellant's defensive theories relating to his intent in sending the message.

It's a little hard to draw big life lessons from a case like this, but I think picking a psychic is a bit like picking any other professional service provider. The relationship has to be grounded in trust; if you don't trust your service provider, find a different one, because no performance "test" will cure any trust skepticism. And with respect to verifying a psychic's powers in particular, if it turns out that they are telling the truth, it seems foolhardy to antagonize someone who can make "petitions to the universe".

Posted by Eric at 08:56 AM | Content Regulation , Evidence/Discovery | TrackBack

March 29, 2012

Facebook Posts Complaining About Supervisor Conduct do Not Support Retaliation Claim – DeBord v. Mercy Health System

[Post by Venkat Balasubramani]

DeBord v. Mercy Health System of Kansas, Inc., 10-4055-SAC (D. Kan.; Mar. 20, 2012)

DeBord worked in Mercy Health Systems’ radiology department for approximately five years. She had a supervisor (Weaver) who the court describes as having “unusually cold hands.” Apparently the supervisor was in the habit of asking employees to “feel his hands.” He also “touch[ed their] upper arms or the back of their necks.” Not surprisingly, most employees did not react positively to Weaver’s conduct.

One day, Weaver made comments to DeBord about her productivity which upset her. Apparently in an effort to comfort DeBord, Weaver attempted to put his arm around her. DeBord declined the attempted “hug” (as the court describes it). Later that day, she posted comments on Facebook mentioning Weaver’s touchy-feelyness. She also mentioned that she liked it when her boss added extra money to her paycheck for hours which she did not work:

1. Sara DeBord loves it when my boss adds an extra $600.00 on my paycheck for hours I didn’t even work…awesome!!
2. SB is sooo disappointed…can’t believe what a snake my boss is…I know, I know everyone warned me.
3. he adds money on peoples checks if he likes them (I’ve been one of them)…and he needs to keep his creapy (sic) hands to himself…just an all around d-bag!!

The posts caused a stir, and Weaver brought them up with Mercy’s director of HR, who asked DeBord whether she authored the posts. She initially denied that she had, but she later admitted it. The HR director suspended her without pay as a result of this. Presumably in an effort to investigate any allegations of harassment, the HR director also asked DeBord about her “creapy hands” comment. DeBord replied that “Weaver had made comments about her body and would run his hands up inside the arm of her scrubs and down the inside the back neck of the scrubs.” When asked whether DeBord considered this to be harassment, she shrugged it off, saying that she thought her supervisor was “just a pervert.”

The HR director separately investigated the issue of extra money in DeBord’s paycheck. Although DeBord was instructed to keep the matter confidential, she apparently texted a co-worker about the issue while the investigation was ongoing.

Shortly after the investigation, Mercy terminated DeBord, giving the following reasons: (1) she had been dishonest in denying the Facebook posts; (2) she made unfounded accusations against her supervisor about the extra money in her paycheck; (3) she failed to maintain confidentiality regarding the paycheck investigation; and (4) her discussion of the paycheck investigation with her co-workers was disruptive. DeBord sued, asserting claims for retaliation, harassment, and battery. Weaver counterclaimed for defamation.

Retaliation: The court assumes that DeBord made out a prima facie case of retaliation, but nevertheless dismisses DeBord’s claim, finding that the employer offered a legitimate, non-discriminatory reason for her discharge: “her inappropriate behavior and dishonesty [relating to the Facebook post].” Because the employer articulated a legitimate reason for her discharge, DeBord was required to come up with evidence showing that the justifications were pretextual. The court finds her evidence lacking. At the time of her termination, the HR director believed that DeBord had been overpaid, although this turned out to not be true (she had been overpaid $475 due to a clock-in error). More importantly, the court agrees with the employer that DeBord shouldn’t have texted a co-worker about the investigation after being instructed not to do so and she shouldn’t have lied about making the Facebook posts.

Harassment: The court dismisses the harassment claim, finding that the employer had reasonable measures in place and acted promptly to correct any harassment once it was brought to its attention.

Battery: DeBord’s assault claim based on the “attempted hug” fails. The court finds that the attempted hug does not amount to either an assault or a battery because there was no intent to cause bodily harm, and there was no offensive touching.

Defamation (counterclaim): Weaver’s defamation claim against DeBord was premised on three statements: (1) the Facebook post about extra money in her paycheck; (2) a text message about the overpayment investigation; and (3) two oral statements to co-workers relating to the investigation. The key question on the defamation claim is whether the statements damaged Weaver’s reputation and the court finds that Weaver fails to put forth adequate evidence of damage to his reputation. Ironically, one of the witnesses testified that she had an opinion of Weaver as “creepy” (the testimony quoted by the court is equivocal but that’s a fair reading of it) anyway, but this was based on the witness’s own experience with Weaver. Another witness testified that she avoided Weaver because Weaver’s statements made her “feel uncomfortable.” This witness scoffed at the idea that her opinion of Weaver’s character would be altered by a single post:

No. I find it very funny that – that his character is in question based on a post. I would be more concerned that his character would be in question due to the way he acted and the things he said in the department. That is – I’m laughing. I mean, that is almost comical to me.

The HR manager also testified that although he had some problems with Weaver, these perceived problems were because Weaver had “difficulty leading the department.” The court also addresses the testimony of a few other witnesses but finds that this testimony is insufficient to raise an issue of fact as to damage to Weaver’s character from DeBord's statements.

The first thing that jumps out at you about this dispute is the totally nonchalant way in which the court treats Weaver’s conduct. Weaver has cold hands so he has a habit of making employees feel how cold his hands are. This touchy-feeliness was corroborated by several employees in deposition testimony. The court sloughs this off as typical workplace conduct. Is the court caught in a time warp? Is this an episode of Mad Men? Interestingly, in resolving Weaver’s defamation claim, the court says that Weaver’s reputation is not damaged, recounting evidence that other employees did not view Weaver's conduct as always appropriate. While the court accepts evidence that other employees had a less-than-stellar opinion of Weaver (due to Weaver’s conduct) for purposes of the defamation claim, this evidence gets no traction at all in the court’s evaluation of whether Weaver engaged in conduct that’s not appropriate in the workplace. The court also signs off on the employer's less than thorough investigation of DeBord's complaints, which consisted of interviewing DeBord, Weaver, and one other employee. The employer did not appear to have spoken to the several other employees who described Weaver's conduct as inappropriate.

Then there’s the content of DeBord’s Facebook posts. One complained about allegedly inappropriate conduct occurring in the workplace and the other implies that DeBord’s boss favored people he likes by giving them extra money on paychecks. You would think an employee could not be fired for making these types of posts, but the court finds no problem with this. Hello, NLRB! I understand that NLRB’s policy on social media terminations only governs social media posts which raise certain types of issues relating to employment practices, but given the broad interpretation which the NLRB has given these guidelines, I was surprised to see a court say that it was appropriate for the employer to fire DeBord based on these posts. (I continue to think the NLRB policy statements appear overly aggressive in scope, and maybe courts will be inclined to agree. In any event, there’s certainly some tension here.)

At the end of the day, the harassment issue came to the surface due to DeBord’s Facebook posts, but this is exactly what she was terminated for. The employer’s question as to whether DeBord authored the Facebook posts was curious since I thought this would have been obvious from the face of the posts. DeBord’s denial that she made the posts—after the HR director showed her the posts on his laptop—was also interesting, but entirely understandable as a reaction in the heat of the moment.

It’s not surprising to see Weaver’s defamation claim fail. The guy who several employees describe as overly touchy should think twice about bringing a defamation claim based on statements about his workplace conduct, but that’s neither here nor there.

In an age where employees and social media are viewed as toxic mix from a liability standpoint, it’s nice to see a judge who isn’t overly agitated by a social media-based employment decision. On the other hand, the facts of this case probably warranted a closer look, and I’m surprised the employer received a free pass. [Employment lawyers: please enlighten me if I’m missing something.]

[Eric's reminders from 4th grade: 1) Keep your hands to yourself. 2) It's always the cover-up, not the crime.]

Previous posts:

Employee Wins Harassment Claim Based in Part on Co-Workers' Offsite Blog Posts
Company Not Responsible for Harassive Comments by Coworker on Personal Facebook Page -- Amira Jabbar v. Travel Services
Do Employers Really Tread a Minefield When Firing Employees for Facebook Gaffes?

Posted by Venkat at 09:24 AM | Content Regulation

Lawsuit Against Avvo for Lawyer's Profile Dismissed as SLAPP--Davis v. Avvo

By Eric Goldman

Davis v. Avvo, 2:11-cv-01571-RSM (W.D. Wash. March 28, 2012). Avvo's post when the lawsuit was initially filed.

Florida lawyer Larry Joe Davis, Jr. claimed that his Avvo profile misrepresented his practice. He sued Avvo in Florida for false advertising, publicity rights misappropriation and unfair trade practices. Avvo invoked the forum selection clause in its user agreement to successfully transfer the case from Florida to Washington. In this ruling, the court finds the lawsuit is a SLAPP and dismisses the case. Further, per Washington's anti-SLAPP statute, Avvo will get its attorneys' fees plus a $10k bonus. In other words, another lawyer-plaintiff will be writing a large check to the defense for a lawsuit he never should have brought.

The court first finds that a lawsuit over providing information to the public to help them choose professional service providers constitutes "an action involving public participation.” The court treats this as self-evident, but as I've documented before, California courts (for anti-SLAPP purposes) don't automatically treat consumer reviews as matters of public concern even though I think they should. It's good to see this court recognize the social importance of providing information that guides the marketplace's invisible hand.

Once Avvo made that threshold showing, the burden fell on Davis to show his prima facie case, which he failed to do. On the crucial question of whether Avvo's allegedly wrongful activities occurred in "trade or commerce," the court says Avvo's ad-supported listings are not sufficiently commercial, citing Avvo's 2007 win in the similar Browne case.

The key to this ruling is that Washington's anti-SLAPP law is more robust that Florida's mostly toothless anti-SLAPP protection. Had Avvo not been able to transfer the case to Washington and get its choice-of-law provision enforced, it probably still would be litigating the case and burning its cash. This story turned out well for Avvo, but the case nevertheless highlights the potential deficiencies of some states' anti-SLAPP laws. This is another reason why we need federal anti-SLAPP protection.

Posted by Eric at 08:16 AM | Content Regulation , Marketing , Publicity/Privacy Rights | TrackBack

March 27, 2012

Emailing the URL of an Allegedly Defamatory Post Immunized by 47 USC 230--Shrader v. Biddinger

By Eric Goldman

Shrader v. Biddinger, 2012 WL 976032 (D. Colo. February 17, 2012). That ruling is the magistrate's report. The judge adopted the magistrate report verbatim last week. The initial complaint. This case also produced an interesting 10th Circuit ruling on jurisdiction: Shrader v. Biddinger, 2011 WL 678386 (10th Cir. Feb. 28, 2011).

Shrader entered into an agreement with Stewart to publish Shrader's content. That relationship soured, and Shrader demanded that Stewart stop publishing the content. It's not clear Stewart ever did so.

In connection with their publication dispute, Stewart emailed some critical remarks about Shrader to Biddinger, who posted the email to a Wave59 message board. Wave59 didn't remove the post after learning of Shrader's direction, and indeed Wave59 principal Beann personally emailed the post's URL to various interested folks.

Shrader, suing pro se, initiated the kind of sue-everyone legal proceedings that we sometimes see from pro se litigants. The magistrate's decision (as approved by the judge) ends big chunks of Shrader's lawsuit and, to boot, awards some attorneys' fees under Colorado §13-17-201 (which basically applies to tort claims which the defense wins on a 12(b) motion). If Shrader has any money, he will be writing a good-sized check to some defendants for their troubles.

Wave59 and its principal Beann get a successful 47 USC 230 immunity. This outcome is so obvious, I doubt these defendants would have been sued in the first place if Shrader had used an attorney. The magistrate says:

neither Beann nor Wave59 originated the posting plaintiff finds objectionable. Rather, Biddinger was the “information content provider.” Wave59 was the “interactive computer service.” Consequently, this court finds that the CDA provides these defendants with federal immunity against the plaintiff's state tort claims based upon the posting being placed on and kept on the Wave59 website

(Just to clarify, Biddinger isn't necessarily the ICP of any defamatory content. Instead, he may have had his own 230 immunity for republishing Stewart's email per Batzel and Barrett v. Rosenthal).

The magistrate says Section 230 applies even though Wave59 didn't remove the post after getting notice. Further, citing Blumenthal v. Drudge (a slightly odd cite in this context), the court says "even if Beann 'directed' users of the board to [the post], such conduct does not diminish the protections of the CDA's immunity." This result is entirely consistent with Section 230, but at the moment I'm hard-pressed to think of another Section 230 case with closely analogous facts. Let me know if I've forgotten something.

Posted by Eric at 03:25 PM | Derivative Liability | TrackBack

March 25, 2012

Seventh Circuit: No Private Cause of Action Under the Video Privacy Protection Act for Failure to Purge Information--Sterk v. Redbox

[Post by Venkat Balasubramani]

Sterk v. Redbox Automated Retail, LLC, No. 12-8002 (7th Cir. March 6, 2012)

The Video Privacy Protection Act prohibits the disclosure of individuals' videotape viewing habits. The statute also contains a provision requiring “providers” to purge any covered information within certain time periods (one year from when the information is no longer required for the purpose for which it was collected). Class action lawyers sharpened their knives and came after videotape service providers—in this case Redbox—arguing that Redbox did not purge the information as required under the VPPA. Redbox moved to dismiss on the basis that the provision of the statute requiring records to be purged did not provide for a private cause of action. The district court disagreed and denied Redbox’s motion to dismiss. (Here is my earlier blog post on the case: "Redbox Can be Liable Under the Video Privacy Protection Act for Failure to Purge Video Rental Records.") Redbox filed an interlocutory appeal, and with lightning fast speed, the Seventh Circuit reversed the district court (the appeal was submitted on January 24, 2012 and the Seventh Circuit issued its order on March 6, 2012).

After slamming the VPPA drafters for sloppy drafting, the Seventh Circuit concludes that the overall statutory structure indicates that there is no private cause of action in this case. The court says the section which provides a civil cause of action appears immediately following the section which prohibits the disclosure of records and this indicates that the civil cause of action was intended to apply only to the section barring disclosure of records. Also, one of the subsections deals with the acceptance of videotape rental evidence; if the statute provides for a civil cause of action for a violation of all of the subsections (not just the subsection prohibiting disclosure), this would mean that a litigant would have a cause of action against a court for improperly receiving videotape rental records as evidence. (The district court focused on the statute's use of the word "section" as opposed to "sub-section" but Judge Posner is as dismissive of the district court's interpretation as he is of the drafters of the VPPA.)

In addition to the overall statutory structure, the court also highlights that there is no harm from wrongful retention:

Nor would it make a lot of sense to award damages for a violation of the requirement of timely destruction of personally identifiable information, in sub section (e)—the specific issue presented by this appeal. How could there be injury, unless the information, not having been destroyed, were disclosed? If, though not timely destroyed, it remained secreted in the video service provider’s files until it was destroyed, there would be no injury.

In Judge Posner's view, this is a terrible case for statutory damages in the absence of any actual injury. While other courts have held that plaintiffs proceeding under the Driver’s Privacy Protection Act need not prove actual damages in order to be entitled to statutory damages, these decisions involve “unlawful appropriation of private personal information.” Statutory damages would make sense in the event a service provider improperly disclosed the information, but according to Judge Posner, it doesn’t make much sense for the wrongful retention of information:

The injury inflicted by such a failure is enormously attenuated, and it would be no surprise if Congress had decided—as the placement of the damages section suggests—not to provide a damages remedy, let alone a damages remedy requiring no proof of injury.

The court says that plaintiffs aggrieved by a violation of the subsection requiring records to be purged should be able to enforce their rights by requesting an injunction. The court says this is a less “obviously inappropriate” form of relief and one that does not require express Congressional authorization.

Ouch. Another example of judicial hostility to claims made by class action privacy plaintiffs, with a focus on damages.

The court also mentions that plaintiffs added a claim for wrongful disclosure, and telegraphs the fact that in the absence of a showing of actual damages, at least this panel would view a claim for damages for violation of subsection (b)(1) (the disclosure provision) with similar skepticism.

Privacy class action plaintiffs have an uphill battle. Between Article III standing, the merits, judicial skepticism towards statutory damages, and I’m guessing a closer look at the private right of action in any newly enacted legislation, I would say that class action payouts for these types of lawsuits based on violations of federal statutes will become rarer than they already are. Were I a privacy activist, I would consider focusing my efforts on individual cases with clearly demonstrable damages, or on lobbying the companies, the public, or the FTC.

Additional coverage:

Digestible Law (Perkins Coie): "Seventh Circuit Limits Scope of Private Rights of Action under the VPPA"
InsidePrivacy: "Seventh Circuit Strikes VPPA Claim for Retention Damages"
THR, Esq. (Eriq Gardner): The Video Privacy Protection Act, or How Not to Write a Law

Posted by Venkat at 02:22 PM | Privacy/Security

March 23, 2012

Qwest Gets Mixed Rulings on Contract Arbitration Issue—Grosvenor v. Qwest & Vernon v. Qwest

[Post by Venkat Balasubramani]

I recently blogged about Kwan v. Clearwire, which involved Clearwire’s efforts to force arbitration of a consumer dispute. The court in that case looked at Clearwire’s contracting practices and made an initial ruling that customers could not be forced to arbitrate their disputes because of a failure in the contracting process. (There will probably be additional proceedings around the arbitration issue in that case.) Qwest has been involved in class action litigation over its early termination fees and other practices, and courts recently issued rulings in two cases which address similar contracting issues. Both rulings are interesting and instructive because they tackle fundamental contract law questions.

Grosvenor v. Qwest, 09-cv-02848-MSK-KMT (D. Col.; Feb. 23, 2012) [pdf]:

Grosvenor subscribed to Qwest in 2006 and received a disk containing software to activate the service. The install window contained a link to the applicable terms and contained a check-the-box indicating assent to the terms. Grosvenor had to click on “I Accept” in order to proceed with the installation. The only problem was that the install window did not contain the actual terms. Worse yet, it did not even contain a link to the terms. The terms were two links away.

The court says that requiring a user to click through a couple of links in order to view the terms does not as a matter of law pose a bar to contract formation. However, there is another problem:

the fact that a user must navigate a web page in order to ascertain terms of an offer is particularly difficult where the software being installed is the means by which the internet can be accessed.

D’oh! The court says that the record is bereft of facts indicating that Grosvenor already had internet access at the time he signed up for Qwest and thus he probably had “no way of accessing the terms of Qwest’s agreements until he completed installation of the software, and completion of the software installation would not occur until Mr. Grosvenor manifested his acceptance of the terms or [sic] the agreement." Because of this flaw, the court says that the check-the-box presentation of the terms at the time of install probably does not create an enforceable contract.

Qwest also argued that after Grosvenor signed up, he received a “Welcome Letter” that Qwest sent to everyone who signed up. The subscriber letter does a better of job of directing Grosvenor to the operative terms, so the court says this solves the problem of Grosvenor having to dig around. Also, because it was a paper letter sent after Grosvenor obtained internet access, it addresses the problem with the issues which undermined the online terms. Additionally, the court says that because the letter advised users that they should cancel their service in 30 days if they did not agree to the terms, users have the comfort of making their decision in a leisurely manner. The court says that Grosvenor entered into a contract with Qwest in 2006 because he assented to the terms in the letter.

Grosvenor’s underlying qualm with Qwest was over Qwest’s alleged failure to honor a “price for life” guarantee and he argued that this was not part of the original deal—this was something Qwest implemented as part of a service upgrade. The court expresses some skepticism as to whether the upgrade constituted a new agreement but in any event says that because Qwest sent Grosvenor a second welcome letter relating to the upgrade, Grosvenor assented to any new terms. Net result: Qwest and Grosvenor entered into a contract and this contract contained an arbitration clause.

Although the court finds that Grosvenor agreed to Qwest's terms, Grosvenor argued that Qwest's subscriber agreement was illusory because Qwest included a provision that it could modify terms of the agreement at its discretion. Qwest had a Harris v. Blockbuster problem. (See “Stop Saying "We Can Amend This Agreement Whenever We Want"!--Harris v. Blockbuster.”) In Harris, the court invalidated an agreement because the agreement said Blockbuster could amend it at any time and did not have to provide notice to the customer. In Harris, the modified terms were effective upon use of the service by the customer. Qwest had a similar provision in its subscriber agreement saying that Qwest would “modify the Service and/or any of the terms and conditions of [the] Agreement . . . and [changes became] effective upon posting to www.qwest.com/legal.” Other than some precedent that’s unfavorable to Qwest (and binding on the district court) the court says that there’s one big problem to Qwest’s argument that Grosvenor assented to the modified terms by continuing to use the service: Grosvenor had to access the service in order to view the modified terms, and because he had no opportunity to review the terms without continuing to use the service he had no meaningful right to reject the terms.

The court says that the arbitration clause is illusory and unenforceable.

Vernon v. Qwest, 09-cv-01840-RBJ-CBS (D. Col.; Mar. 8, 2012):

Vernor is a companion case but heard by a different judge in the same district. Plaintiffs asserted claims on behalf of a putative class, alleging that Qwest’s imposition of Early Termination Fees was improper. The named plaintiffs all signed up for slightly different offerings from Qwest.

The first question was whether plaintiffs had entered into enforceable agreements with Qwest. The court runs through the “browsewrap” / “clickwrap” taxonomy, and also mentions “hybrid arrangements,” where the terms presented to the customer do not appear in the same screen as the accept button—i.e., the customer must click through a hyperlink to read the terms (citing Fteja v. Facebook and Swift v. Zynga). (See Judge Can't Decide if Facebook's User Agreement is a Browsewrap, But He Enforces It Anyways--Fteja v. Facebook and Zynga Wins Arbitration Ruling on "Special Offer" Class Claims Based on Concepcion -- Swift v. Zynga for posts on these cases.) The court says that assent may be gleaned “from the totality of the circumstances,” and in this case plaintiffs had “reasonable notice” of the terms, so the terms are enforceable. As in Grosvenor, the court looks to the “welcome letter” sent by Qwest and says that this is enough to put customers on notice of the terms.

As a backup argument, plaintiffs also asserted that the arbitration clause was illusory because (as in Grosvenor) Qwest reserved the right to revise the agreement at any time. This court comes to a different conclusion than Gorsvenor and finds that the agreement is not illusory. The agreement said that Qwest can revise the terms at any time and revised terms were effective on posting. However, the agreement contained an exception for when a revision “results in a material and adverse economic impact” to the customer. Where there is a "material adverse economic impact," the agreement required 30 days notice. Based on this, the court says that the agreement does not give Qwest “the unfettered right” to make changes to it and therefore there is no illusory agreement problem. (See the Dow Jones case I blogged about for a similar result: "No Breach of Contract Claim from Mid-Stream Change of WSJ Online Pricing – Lebowitz v. Dow Jones.")

Plaintiffs made two other arguments that didn’t get much traction with the court: (1) that the agreement was unsoncsionable and (2) that Qwest waived its right to insist on arbitration.

It's depressing to see companies not tie up loose ends on their online contracting processes. It immediately makes the customer's claims seem more sympathetic--if the company can't get the contract right, chances are it's going to botch the customer service. It's possible that Qwest had some reason for not presenting the subscriber agreement in the box itself at the time of install, but it better have a compelling reason for not doing so. As a result, the court has to go through judicial contortions to enforce the agreement. The court enforces the agreement due to the fact that the terms were communicated via a letter to the customer. Courts continue to see mail as a legally sufficient form of notice and I wonder whether people in the modern era are likely to read mailings they receive from company's like Qwest. (I know I would recycle it immediately.) Also, there's an FTC rule that governs mailings for free products or services, perhaps it wasn't enough of a colorable issue for plaintiffs to have raised, but I was surprised to not see a footnote from the court on this issue. If there's no agreement as a result of the online terms, Qwest's mailer is ostensibly an offer and I wondered whether offers via mail had to comply with certain requirements.

The illusory agreement issue is one to watch as well. Contracts will continue to come under fire because they include a provision saying one party can change the terms at will. It's an understandable lawyerly instinct to include this in an agreement, but I would resist this impulse! In one of the two cases, Qwest skated past the illusory agreement challenge, but the fact that one of the two judges was willing to strike down the agreement illustrates how risky it can be to include this provision in an agreement.

Previous posts:

Vendor Fails to Form Either an Online or Paper Contract With Customers--Kwan v. Clearwire
Zynga Wins Arbitration Ruling on "Special Offer" Class Claims Based on Concepcion -- Swift v. Zynga
Judge Can't Decide if Facebook's User Agreement is a Browsewrap, But He Enforces It Anyways--Fteja v. Facebook
Stop Saying "We Can Amend This Agreement Whenever We Want"!--Harris v. Blockbuster
Facebook's "Browsewrap" Enforced Against Kids--EKD v. Facebook

Posted by Venkat at 02:10 PM | E-Commerce , Licensing/Contracts

March 22, 2012

No Breach of Contract Claim from Mid-Stream Change of WSJ Online Pricing – Lebowitz v. Dow Jones

[Post by Venkat Balasubramani]

Lebowitz v. Dow Jones & Co., 06 Civ. 2198 (MGC) (S.D.N.Y.; Mar. 12, 2012)

Dow Jones operates WSJ Online. Historically, it offered WSJ Online subscribers access to WSJ Online and Barron’s Online. At some point, Dow Jones decided to spin-off Barron’s. It gave existing subscribers the choice between accessing Barron’s instead of WSJ Online or accessing WSJ Online and paying a separate fee (pro-rated and up to a maximum of $20) to access Barron’s.

Plaintiffs brought a putative class action, arguing that a mid-stream change in the subscription price was a breach of the subscriber agreement. Alternatively, plaintiffs argued that if the agreement was interpreted to allow Dow Jones to unilaterally change the price this would render the contract illusory. The contract provision allowed Dow Jones to:

change the fees and charges then in effect, or add new fees or charges, by giving [subscribers] notice in advance.

The court disagrees, noting that contractual provisions which allow unilateral changes are not illusory as long as the right to make these changes are constrained in some manner. Looking to case law in New York, the court says that requiring an obligor to exercise its discretion in a reasonable manner or a manner evincing good faith sufficiently constrains the obligor’s discretion. The court says this is the case here:

there is no evidence that Dow Jones used the discontinuance provision to deprive plaintiffs of an unreasonably large part of WSJ Online’s content, and there is no reason to interpret this provision as permitting such extreme behavior. Dow Jones acted reasonably, and therefore this provison of the subscriber agreement is not illusory.

Plaintiffs also argued that Dow Jones failed to give advance notice of the price change and this constituted a breach. Dow Jones had provided notice via a “pop-up” box, which indicated that it was conveying an “IMPORTANT NOTICE TO READERS.” This box appeared on each homepage. When users clicked on this box, a notice appeared which informed subscribers of the spin-off and the fact that the pricing would be changing.

There have been a slew of disputes involving contracts which one party says they can modify at any time. Harris v. Blockbuster presented this problem and Eric’s advice was on point: “STOP PUTTING CLAUSES INTO YOUR CONTRACTS THAT SAY YOU CAN AMEND THE CONTRACT AT ANY TIME IN YOUR SOLE DISCRETION BY POSTING THE REVISED TERMS TO THE WEBSITE” It doesn’t look like companies have heeded this advice and thus continue to struggle with arguments from consumers that this type of a provision renders contract illusory. Dow Jones dodged a bullet here, and although I’ll leave the contract law 101 deep dive to others, the result here did not comport with basic common sense and equity. It’s as if you sign up to on a month-long plan to purchase a particular type of combo meal deal at McDonald’s and halfway through they come along and change up the combination. Rather than forcing customers to pick between WSJ Online or Barron’s going forward, Dow Jones could have just refunded a portion of the subscription fees. The court’s decision deprives plaintiffs of this choice. It wasn't clear from the opinion, but it seemed like the decision was made just to separate the two subscriptions--the order did not discuss some compelling reason (other than subscriptions) why Dow Jones made the decision.

Another interesting part of the dispute was how Dow Jones dealt with notice. Dow Jones has to provide subscribers notice in order for the revised terms to be effective. This is another problem area for companies. (See Eric’s post on the Douglas v. Talk America case, where the Ninth Circuit struck down a contract amendment due to failed notice: “Ninth Circuit Strikes Down Contract Amendment Without Notice--Douglas v. Talk America.” Some suggestions as to notice are discussed in that post.) The court here spends two sentences on the adequacy of notice via a pop-up box. The pop-up box method of notice would work in many cases, but it was surprising to see the court ignore the details of the notification here. I suspect other courts would not always be so approving of notice via this method, absent consideration of other facts, such as the size of the box and the overall user experience.

Previous posts:

Posted by Venkat at 06:03 AM | E-Commerce , Licensing/Contracts , Marketing

March 21, 2012

Trademark Lawsuit Over Website Text Comparing Products Baffles the Judge--AR Pillow v. Cottrell

By Eric Goldman

AR Pillow Inc. v. Cottrell, 2012 WL 868109 (W.D.Wash. March 13, 2012). The complaint.

Every time I read an opinion like this, a little piece of me dies. This is a ridiculously easy case, yet somehow it got all tangled up.

The litigants are rival vendors of similar products to combat baby acid reflux. For a slightly similar dispute involving trademark fights over baby products, see BabyAge v. Leachco.

The plaintiff is largely complaining about text on the defendant's website explaining why the plaintiff's product isn't as good as the defendant's. From my perspective, the explanation doesn't constitute a trademark "use" at all because the trademark is being used as a referent. See, e.g., Naked Cowboy v. CBS, 2012 WL 592539 (S.D.N.Y. Feb 23, 2012). Thus, the court should dismiss the trademark claim for non-trademark use. But if the court doesn't do that, at least it should dismiss as a nominative use. See, e.g., 1 800 GET THIN v. Hiltzik. There is absolutely no question that the defendant's reference qualifies as a nominative use under Ninth Circuit law. Yet, and here's where a piece of me dies, the opinion doesn't discuss nominative use AT ALL. What???

Instead of addressing the two most obvious grounds, the court engages in doctrinal contortions to fit this case into a standard likelihood of consumer confusion analysis. As I've explained elsewhere, the multi-factor LOCC test simply makes no sense when a third party is using the trademark editorially as a referent. My paradigmatic example is the Ballysucks case, where the LOCC analysis is ridiculous because the court is trying to compare a vendor with a griper who registered a "sucks" domain. The LOCC test doesn't work any better here. The judge almost seems to know that the LOCC test isn't the right test, but he doesn't seem to know what else to do.

Fortunately, the judge overcomes his shaky analysis by reaching the right result, concluding that there's insufficient evidence of consumer confusion. Yay for good outcomes. But we need to find better ways to make it clear trademark law should not play a role in situations like this. For more on that, see my Online Word of Mouth paper.

One more point: the court's technological discussions are a mixed bag. On the plus side, citing Network Automation and Matt Cutts' blog post/video, the judge rejects the plaintiff's claims over keyword metatags because Google ignores them. But then the judge launches these groaners:

"there is no evidence in the record that use of the term AR Pillow in Google or other search engine currently leads to defendant's website"

and later

"Consumers who search for AR Pillow today are not presented with defendant's website in the rankings"

Oh god, not this again. Please, let's kill this meme RIGHT NOW. Relative placement of search engine results is a HORRIBLE way to evaluate trademark disputes. First, as I explain here, the junior user doesn't control placements--the search engines do. Second, in my post on the Bitchen Kitchen litigation, I explain technological reasons why this is a terrible idea, including search results personalization, the fact that results change minute-by-minute, and the fact that different search engines rank their results differently. Judges, I beg you, please don't go down this wormhole.

Posted by Eric at 10:00 AM | E-Commerce , Trademark | TrackBack

March 20, 2012

Jan.-Feb. 2012 Quick Links, Part 6 (Privacy and more)

By Eric Goldman

Privacy

It was a really busy two months for privacy, and I'm sorry I didn't get to grok a number of these developments in more detail!

* State AGs are unhappy with Google's privacy integration of its services, especially that it doesn't have adequate opt-outs. In fact, every regulator is unhappy about this!

* The White House's Consumer Privacy Bill of Rights

* California AG signs an agreement with various app retailers requiring that the apps they distribute display privacy policies. News.com coverage.

* Browsers are going to incorporate do-not-track options in the software (whatever do-not-track means).

* Fraley v. Facebook, 2012 WL 555071 (N.D. Cal. Feb. 21, 2012) (footnotes omitted):

the court must conclude that Fraley's legitimate desire to protect her privacy does not outweigh the relevance or propriety of Facebook proceeding to take Fraley's deposition. As Fraley herself notes in her declaration, by agreeing to be a class representative, she understood that she would have to participate in discovery and provide testimony. Although the court is sympathetic to Fraley's concerns regarding the scope and intensity of Facebook's likely scrutiny during the course of discovery and particularly in a deposition setting, these are concerns that should have been addressed earlier in the process by Plaintiffs' counsel. Moreover, Plaintiffs have not shown that Facebook's attempts at discovery have been so intrusive or inappropriate, in light of the nature of the litigation and claims at issue, as to require the protection of the court up until this point. In addition, the protective order already in place between the parties is available to Plaintiffs for the specific reason that certain information disclosed during the course of discovery is not appropriate for public dissemination. The fact that other named plaintiffs remain in the case does not render Fraley's testimony concerning her allegations to be any less relevant. If anything, the fact that Fraley may soon be dismissed from the lawsuit makes even more relevant Facebook's discovery into the basis for Fraley's allegations that will be a part of the record in this case. Even if Fraley is dismissed from the case, the court may consider the relevance of her earlier testimony to Facebook's ongoing defense

* In re Facebook Internet Tracking Litigation, 2012 WL 432607 (U.S. Jud. Pan. Mult. Lit. Feb. 8, 2012). Facebook's tracking cases are consolidated in Northern District of California.

* Netflix is paying $9M to settle its Video Privacy Protection Act (VPPA) lawsuit.

* Some interesting work from Jane Yakowitz (incoming law professor at University of Arizona):
- On the EU Data Protection Directive: More Crap From the E.U.
- Jane Yakowitz, Tragedy of the Data Commons, 25 Harv. J.L. & Tech. 1 (Fall 2011). An important rely to Paul Ohm's reidentification paper.

* How offline retailers target their consumers, with some background on the science of neuromarketing: "we found out that as long as a pregnant woman thinks she hasn’t been spied on, she’ll use the coupons. She just assumes that everyone else on her block got the same mailer for diapers and cribs. As long as we don’t spook her, it works." A reminder that all of the panic about online data collection may be missing the point.

* WSJ: Is Google tracking iPhone users impermissibly? Plaintiffs' lawyers have already filed multiple suits.

* Gaos v. Google, Inc., 2011 WL 7295480 (N.D. Cal. April 7, 2011). This one just came through Westlaw. Court dismissed a privacy lawsuit over Google including search terms in referral URLs on Article III grounds.

* In re Indiana Newspapers Inc., 2012 WL 540796 (Ind. App. Ct. Feb. 21, 2012). "Under our Shield Law, we hold that an anonymous person who comments on an already-published online story and whose comment was not used by the news organization in carrying out its newsgathering and reporting function cannot be considered “the source of any information procured or obtained in the course of the person's employment or representation of a newspaper” "

* Red Tape: Govt. agencies, colleges demand applicants' Facebook passwords.

General

* Economists adopt a conflicts-of-interest statement for their academic publications. Law professors desperately need an equivalent.

* Smith v. eBay Corp., 2012 WL 27718 (N.D. Cal. Jan. 5, 2012): antitrust claim against eBay for tying PayPal with eBay's auction fees partially survives motion to dismiss.

* BNA (unfortunately paywalled) previews some of the key cases pending at federal appellate courts that might produce an opinion in 2012. The list includes:

- Viacom Int'l Inc. v. YouTube LLC, No. 10-32780 (2d Cir.)
- Capitol Records Inc. v. Thomas-Rasset, No. 11-2820 (8th Cir.)
- Flava Works v. Gunter d/b/a myVidster.com, No. 11-3190 (7th Cir.)
- Righthaven LLC v. Hoehn, No. 11-16751 (9th Cir.)
- United States v. Nosal, No. 10-10038 (9th Cir.)
- Rosetta Stone Ltd. v. Google Inc., No. 10-2007 (4th Cir.)
- Cohen v. Facebook, No. 11-17840 (9th Cir.)
- Stayart v. Google Inc., No. 11–3012 (7th Cir.)

Others include Graf v. Zynga, Levitt v. Yelp, Parisi v. Sinclair, Jones v. Dirty World and Maximized Living v. Google.

* Universal Grading Service v. eBay, Inc., 2012 WL 70644 (N.D.Cal, Jan. 9, 2012). Another antitrust lawsuit against eBay dismissed, this time involving eBay's use of third party coin grading services. This case has been appealed to the Ninth Circuit.

* WSJ on fine print in consumer contracts.

* NYT: Young, in Love and Sharing Everything, Including a Password. A spectacularly bad idea. Famous last words: “I know he’d never do anything to hurt my reputation” An adult is quoted: “I’ve known plenty of couples who have shared passwords, and not a single one has not regretted it,”

* Burgess v. eBay appealed.

* Only 20% like Facebook's new Timeline. I'm holding out as long as I can.

* LA Weekly: A gentlemen's hypersensitivity to how his name is spelled + a law degree = recipe for disaster.

* William Mitchell Law Review had a symposium issue on Contemporary Issues in Cyberlaw. I've posted the published version of my essay "Revisiting Search Engine Bias" on Google & antitrust issues.

* Ceglia v. Zuckerberg, 2012 WL 503810 (W.D.N.Y. February 14, 2012). "Defendants are awarded in connection with their Accelerated Motion to Compel $75,776.70 in attorney's fees, and are also entitled to an award of costs, including attorney's fees, incurred preparing and defending the Fee Application, but Defendants' request for an order prohibiting Plaintiff from filing any papers in support of this action until such fees are paid is DENIED."

Posted by Eric at 04:25 PM | Privacy/Security | TrackBack

Another 512(f) Claim Fails--Ouellette v. Viacom

By Eric Goldman

Ouellette v. Viacom Intern., Inc., 2012 WL 850921 (D. Mont. March 13, 2012). Prior blog post on the case.

Ouellette brought a 17 USC 512(f) claim against Viacom for sending bogus takedown notices. As we know, it's almost impossible to win 512(f) cases, and as a pro se, Ouellette had no chance.

In setting the standard, the court says the copyright owner must consider the fair use doctrine (citation to the Lenz case):

the fair use doctrine is necessarily part of a copyright owner’s initial review of potentially infringing material, and must be considered in assessing whether a copyright infringement exists

Nevertheless, this gesture towards fair use doesn't really help this or any other 512(f) plaintiff. Per the Rossi case, the 512(f) standard remains that the copyright owner's bad faith is measured subjectively. Ouellette argued that he successfully counter-noticed Viacom's takedowns, that Viacom kept DMCAing his videos, and that Viacom uses scanning software without human oversight. Even if all of that is true, the court says, "Ouellette has not presented any factual information plausibly suggesting Viacom actually knew Ouellette made fair use of its copyrighted material, and that it acted with the requisite subjective bad faith in issuing its takedown notices."

Part of that was due to Ouellette's pleading failure for not explaining why his publications qualified for fair use. (I assume future 512(f) plaintiffs will rectify that). Even so, it's clear the Rossi requirement of subjective bad faith dooms almost all 512(f) complaints unless the plaintiff, when filing the complaint, (a) has smoking-gun evidence of subjective bad faith, (b) can make an overwhelmingly compelling case that the publication was obviously protected by fair use, or (c) the takedown notice had material factual errors (like it took down something the copyright owner didn't even own). Given the virtual impossibility of winning 512(f) claims, this case just gives us more reasons to favor 512(f) reform.

We blog virtually every 512(f) case we see.

Posted by Eric at 11:00 AM | Copyright , Derivative Liability | TrackBack

Suspension for Facebook/YouTube Rap Video Critical of High School Coach Does not Violate First Amendment – Bell v. Itawamba County School Board

[Post by Venkat Balasubramani]

Bell v. Itawamba County School Board, 11CV00056-NBB-DAS (N.D. Miss.; Mar. 15, 2012) [.pdf]

Bell posted a rap video while he was a senior at Itawamba Agricultural School. The video, which was shared which over 1300 of his Facebook friends, criticized two coaches at the school and included the following phrases:

looking down girls’ shirts / drool running down your mouth / messing with the wrong one / gonna get a pistol down your mouth
middle fingers up if you can’t stand that nigga / middle fingers up if you want to cap that nigga

After the video came to the attention of the school, Bell was pulled out of class and met with the principal. Bell acknowledged making the video, but he said that the allegations of improper contact with female students were true. After a disciplinary hearing (where Bell was represented by counsel), Bell was suspended for seven days and transferred to an “alternative school” for the remaining five weeks of the term. The school district concluded that Bell “threatened, harassed, and intimidated school employees with the publication of his song.” Bell sued, alleging violations of his First Amendment and Due Process rights.

Off-campus conduct versus in-school conduct:

As in many school discipline cases based on social networking posts, the first question was whether the school had the authority to discipline Bell for conduct that ostensibly occurred off-campus. The court acknowledges mixed precedent on this issue, but says that the Supreme Court’s decision in Tinker v. Des Moines Independent Community School District supports discipline for off-campus conduct. I’m not familiar with the precedent in this area, but Tinker involved on-campus speech, and I think it’s a stretch to see Tinker as clearly standing for the proposition that off-campus speech can be regulated under the same First Amendment standards as those articulated in Tinker. (The Supreme Court cases following Tinker have all dealt with on-campus or school sanctioned events.) That said, my instinct is that this may ultimately be a tough battle for students to win, at least where the speech at issue relates to the school, teachers, or administrators. (See Eric's post on Layshock and Blue Mountain for differing results on this issue from a pair of Third Circuit cases: Third Circuit Schizophrenia Over Student Discipline for Fake MySpace Profiles.)

Whether the suspension was appropriate under Tinker:

The court says that high school students do not enjoy the same First Amendment rights as adults or people outside the school setting. According to the court, a school may discipline a student for speech where disruption is “reasonably foreseeable.” The court frames the issue as whether (1) Bell’s song “caused or tended to cause a material and/or substantial disruption” and (2) whether “it was reasonably foreseeable to school officials that the song would cause a material and/or substantial disruption.” Evidence in the record showed that one of the coaches heard of the song through his wife and he had also discussed the song with several students. After listening to the song, he complained to the principal and also testified that the song (and exposure of the song) had affected his teaching style. The other coach also testified as to supposed adverse effects to his teaching. This evidence, along with the fact that the song was published to Bell’s 1300 friends and uploaded to YouTube, where it would be exposed to an “unlimited internet audience,” leads the court to conclude that the school’s forecast of substantial disruption was reasonable. The court also affirms the school district’s conclusion that posting the song constituted “harassment and intimidation of teachers and possible threats against teachers.” Finally, the court says that the individual actors are entitled to qualified immunity.

The threat issue seemed like a red herring. Given the incidents of school violence, schools should undoubtedly take any and all threats seriously, but you have to wonder whether the courts (and the school) looked at the video and took it out of context. It’s a rap video…by a high school senior…posted to Facebook. Were the coaches seriously threatened by it? Did the student intend it to be a threat? Unlikely. The First Amendment allows schools to punish students based on speech that does not reach the level of a “true threat,” but it was strange to see the court sign off on the school’s conclusion that Bell threatened (or harassed or intimidated) the coaches based on the video. (Then again, even outside the school context, courts have grown increasingly willing to call YouTube and Facebook videos threats which can support criminal prosecutions. See Court Finds That Threatening Video Posted to YouTube and Facebook Can Constitute a "True Threat" -- US v. Jeffries; Federal Prosecution Over "Threats" on Craigslist – US v. Stock.)

The court’s conclusion on the disruption issue was also debatable. Tinker has spawned a morass of lower court decisions which struggle with whether Tinker required a “substantial threat of disruption” or a “reasonable forecast” of disruption and what sort of an evidentiary burden the school district bears in this context. Lower court cases go both ways on this, but here there didn’t seem like there was much—apart from the teachers' own testimony that the video had an ‘adverse effect’ on their teaching style—to support the conclusion that there was a credible threat of disruption.

Finally, the qualified immunity decision was a tough hurdle for Allen. I didn’t check the complaint to see whether he brought claims for injunctive relief (clearing his record) and nominal damages, but I wondered whether this strategy could have avoided the harsh effects of qualified immunity.

School administrators should be able to punish students for causing disruption, and criticizing teachers, administrators and other students should warrant discipline in some instances, but I wonder if the court's ruling gives short shrift to the First Amendment rights of students. If all that is required is some self-serving allegation of an "adverse effect" on teaching style, this means that a teacher can shut down student speech any time the student says something critical about the teacher. The court's stamp of approval of the school's conclusion that the video harassed and intimidated the teacher also made me think that the court didn't have a very expansive view of the scope of student speech rights. The final thing that made me pause is that the student said the allegations of inappropriate contact between the coaches and students were truthful, and the court did not comment on this at all. Posting a rap song on Facebook and YouTube isn't exactly the most appropriate way to bring something like this to the attention of school administrators, but if the allegations were true, this should change the First Amendment calculus somewhat.

In the old days, this would have been nothing more than hallway gossip, which many would view as harmless. Maybe Bell would have found a way to convey his message through the school newspaper or in an assembly. The same message can now be broadcast (as the court notes) to an "unlimited internet audience." Indeed, Bell had 1300 friends, and his posting the video is a "publication" in the best and worst senses. It's protected by the First Amendment, but it reaches the bulk of the school community in ways that might be impossible through hallway gossip or even through the school newspaper or a school assembly. We're not used to students having a better ability to reach other students than the administration has. Students also don't need to go through any channels to get their message out there. Maybe this shift in power causes administrators to overreact somewhat?

Eric posted about a pair of Third Circuit cases a couple of years ago. Not much has changed since then, and I think we can expect to see a ton of litigation around this issue, with little predictability. The Supreme Court recently denied cert on a pair of school discipline cases, so we'll have to wait awhile to get clarity from the Court, to the extent the Court can be expected to articulate a bright line rule of any sort.

Added: here's a link to what looks like the video in question: "T-Bizzle - PSK da Truth" (h/t Brad Wassom, who also covers the case).

Other coverage:

Ed Week: Judge Denies Speech Protection to Student's Rap Song
Student Press Law Center: Judge upholds punishment of Miss. student who posted rap song on Facebook

Posted by Venkat at 05:44 AM | Content Regulation

March 19, 2012

Irrational Copyright Lawsuit Over "Pi Symphony" Gets Sliced--Erickson v. Blake

By Eric Goldman

Erickson v. Blake, 2012 WL 847327 (D. Oregon March 14, 2012). The complaint. A prior ruling in the case transferring it from Nebraska to Oregon for jurisdictional reasons. Techdirt's coverage (1, 2).

This case could be an instant copyright law classic. It provides a textbook illustration of a critical copyright doctrine (the idea-expression dichotomy), it involves musical principles that everyone--especially students--can relate to, its facts could be easily adapted to a law school exam, and the subject matter provides endless punning opportunities.

Lars Erickson composed the "Pi Symphony" by assigning each numeral 0-9 to a musical note and then playing the notes corresponding to pi's digits. Read some background on his approach, or watch the video. (In the video, he plays a little "e" as well).

Michael Blake did the same basic thing: he assigned numbers to notes and then played pi using those notes. See his video, “What Pi Sounds Like.” Not surprisingly, because both Erickson and Blake draw from the same source, their outputs have some commonalities.

From a legal standpoint, basic copyright law says no one can copyright either the idea of assigning musical notes to numbers or the idea of playing the notes assigned to a number, whether it's pi, e, pi in base 8 (which might have made some sense to match the scale), the square root of 2 or the speed of light. The court says:

Pi is a non-copyrightable fact, and the transcription of pi to music is a non-copyrightable idea. The resulting pattern of notes is an expression that merges with the non-copyrightable idea of putting pi to music: assigning digits to musical notes and playing those notes in the sequence of pi is an idea that can only be expressed in a finite number of ways. This does not mean that Mr. Erickson's copyright is invalid, only that Mr. Erickson may not use his copyright to stop others from employing this particular pattern of musical notes.

But because there are many options for musically implementing the number pi, it's possible to have a copyrightable expression of that pattern:

What may be protected by copyright is the combination of that pattern with other musical elements: the choice of scale, rhythm, harmony, and embellishments or variation, for example.

Thus, Erickson can have a copyrightable expression of pi set to music, but his copyright is so thin that Blake's expression doesn't infringe it:

.Pi Symphony and “What Pi Sounds Like” employ different rhythms, different phrasing, different harmonies, and different tempos....Thus, after the similarities based on unprotected elements of Pi Symphony are set aside, very few—if any—similarities remain. Mr. Erickson's copyright is therefore “thin” and protects his work only from virtually identical copying....Mr. Erickson's copyright, which is presumed valid, protects his expression of the musical pattern formed by the digits of pi. But what is original about that expression—the cadence, flourishes, harmonies, structure, and so on—is not virtually identical, or even particularly similar, to “What Pi Sounds Like.”

The court closes the circle by rebuking the plaintiff:

Mr. Erickson's grievance may be based not so much on any “copying” by Mr. Blake, but rather on the perception that Mr. Erickson's years of hard work in promoting Pi Symphony were undermined by the sudden popularity of Mr. Blake's work and the media attention it received....Given statutory law, the Constitution, and Supreme Court precedent, Mr. Erickson cannot use his copyright to stop Mr. Blake from employing the same idea—the transcription of the digits of pi to musical notes.

That's a thick list of authority telling Erickson to get over it. Plaintiffs, if you're basically bringing a "sweet of the brow" claim, don't go pi-ing to the courts. (Sorry, I needed at least one groaner).

The New Scientist story on this ruling.

Note: the judge issued this opinion on March 14. Cute! I love judges with a sense of humor. Happy belated Pi Day!

Posted by Eric at 08:40 AM | Copyright | TrackBack

March 17, 2012

Text Spam Class Action Against Jiffy Lube Moves Forward – In re Jiffy Lube Int’l, Inc., Text Spam Litigation

[Post by Venkat Balasubramani]

In re Jiffy Lube International, Inc., Text Spam Litigation, 11-md-2261-JM-JMA (N.D. Cal.; Mar. 9, 2012)

Plaintiffs filed a class action against Jiffy Lube (a multi-location franchisee Heartland Automotive Services) and TextMarks alleging TCPA violations based on text messages sent by TextMarks on behalf of Jiffy Lube:

JIFFY LUBE CUSTOMERS 1 TIME OFFER:REPLY Y TO JOIN OUR ECLUB FOR 45% OFF A SIGNATURE SERVICE OILCHANGE! STOP TO UNSUB MSG&DATA RATES MAY APPLY T&C:JIFFYTOS.COM.

The court denies Heartland’s motion to dismiss. The big takeaway from the order is that text message-based marketing is something that companies often screw up, and these screw-ups end up being costly. Given the draconian provisions of the TCPA (statutory damages, stringent consent provision, no free pass for the initial message, and liability for any unsolicited message that is sent with certain equipment), rulings like these make me think companies should consider avoiding text message-based marketing altogether.

TCPA Provides for Derivative Liability:

Heartland’s first argument was that it should not be held liable because it did not actually send out the text messages (TextMarks did). The court cites to Satterfield v. Simon & Schuster and notes that the Ninth Circuit had no problem imposing liability on Simon & Schuster despite the fact that Simon & Schuster did not physically send the messages. The court also cites to an unsolicited fax case for the proposition that “congressional tort actions implicitly include the doctrine of vicarious liability.” If advertisers were allowed to escape liability by not actually sending the messages, this would allow advertisers to make an end-run around the TCPA’s prohibitions.

Heartland also argued that plaintiffs failed to sufficiently plead vicarious liability, but the court says that plaintiffs’ allegation that Heartland "engaged TextMarks to send the messages" is sufficient.

Plaintiffs’ Prior Consent:

Heartland produced invoices and sought to rely on the invoices to demonstrate that plaintiffs consented to receive the messages. The court rejects Heartland’s request that the court take judicial notice of the invoices, saying they stand for the opposite of what plaintiffs allege in their complaint. The invoices are not central to plaintiffs’ claims; therefore, they are not properly the subject of judicial notice in the same way that contractual terms—which the plaintiff relies on in the complaint—are. In passing, the court expresses skepticism as to whether the invoices would satisfy the TCPA's strict consent requirements.

Were the Messages Sent Using an Auto-Dialer:

The TCPA only imposes liability for text messages that are sent using equipment that has the capacity to store or produce random numbers. Heartland argued that plaintiffs should only be permitted to allege the use of an auto-dialer on in formation and belief if (1) the content of the message was impersonal, and (2) the text message was sent by a specific SMS-short code. I think what Heartland is trying to argue is that only if the text messages bear indicia of being transmitted en masse should a TCPA plaintiff be entitled to allege the use of an auto-dialer on information and belief. The court rejects this, noting that in Simon & Schuster the Ninth Circuit only required that the equipment at issue have “the capacity” to store or produce numbers using a random or sequential number generator. Under Satterfield, it does not matter whether this capability was actually used to send the messages.

First Amendment Challenge:

Heartland also brings a First Amendment challenge, arguing that the broad definition of auto-dialer would mean that friends who text each other dinner invitations could incur TCPA liability, and this would render the statute overbroad. As expected, this argument doesn’t get much traction with the court. The court says that the statute is intended to protect consumers against the costs and privacy invasions that accompany unsolicited text messages, and regulating texts sent through auto-dialers adequately serves this interest. The court also says that the prospect of friends incurring liability under the TCPA for texting each other dinner invitations is fairly remote. At worst, this type of a text message lies at the fringe of the statute and thus the statute does not suffer from overbreadth issues.

Plaintiffs’ Cannot be Compelled to Arbitrate Their Claims:

Heartland finally argued that one of the plaintiffs who signed an agreement with Jiffy Lube (and other class members who fell into the same category) should be required to arbitrate their dispute. This plaintiff entered into an agreement while obtaining services at Jiffy Lube which contained the following provision:

[the parties] agree that any and all disputes, controversies or claims between Jiffy Lube and [the customer] (including breach of warranty, contract, tort or any other claim) will be resolved by mandatory arbitration according to the terms of this Mandatory Arbitration Agreement (“Agreement”), except that any such dispute can be resolved by a small claims court if and for so long as the dispute is within its jurisdiction. By this Agreement, Jiffy Lube and [customer] also agree to only bring disputes against each other in an individual capacity and not as a class representative or class member and waive the right to a jury trial.

The court says the arbitration language is “incredibly broad,” and application of the clause to disputes unrelated to the contract would raise conscionability issues. The court cites to a Judge Posner opinion and concludes that if enforced as drafted, “absurd results would ensue.” Heartland asked the court to construe it narrowly but the court declines, saying it is not authorized to do so. Even if the clause were construed to be limited to disputes “arising out of or relating” to the contract, the court says that the TCPA claims would not fall within the clause.
__

As mentioned above, text message litigation has been brutal for marketers and advertisers, and this decision is no different. (Liability for spam email in contrast has been much more limited.) To my knowledge, the issue of dervative liability hasn't been squarely argued by a TCPA defendant, but decisions have implicitly recognized that the TCPA provides for derivative liability in rejecting the requests to dismiss filed by advertisers who did not transmit the messages in question. From that standpoint, the ruling is not significant, but it is still worth nothing.

Outsourcing your text message-based marketing was a risky proposition to start with, but as this decision squarely allows for derivative liability (albeit under somewhat vague standards), this makes it an even riskier proposition. Marketers may labor under the perception that the initial text message is a freebie (from a liability standpoint) and including an opt-out from receiving future texts absolves the marketer or advertiser from liability under the TCPA. It's worth repeating that this is not the case.

Previous posts:

"Group Text Services Grapple with TCPA Class Actions"
"Text Spam Lawsuit Against Citibank Moves Forward Despite Vague Allegations of Consent -- Ryabyshchuk v. Citibank"
"Court Rejects Constitutional Challenge to TCPA Based on Vagueness in "Prior Express Consent" Exception -- Kramer v. Autobytel, Inc."
"Another Court Finds that TCPA Applies to Text Messages -- Lozano v. Twentieth Century Fox Film Corp."
"Court Finds that SMS Spam Messages are Subject to the TCPA and Rejects First Amendment Defense -- Abbas v. Selling Source, LLC"
"Ninth Circuit Revives TCPA Claim--Satterfield v. Simon & Schuster"
"Cellphone Spam Violates TCPA--Joffe v. Acacia Mortgage"

Posted by Venkat at 08:46 AM | Derivative Liability , Marketing , Privacy/Security , Spam

March 16, 2012

Facebook's "Browsewrap" Enforced Against Kids--EKD v. Facebook

By Eric Goldman

E.K.D. v. Facebook, Inc., 3:12-cv-01216-JCS (S.D. Ill. March 8, 2012). The complaint.

This opinion reaches two interesting conclusions. First, it says children-users can't disaffirm Facebook's terms of service (TOS) so long as they keep using the site. Second, it says the children-users are bound to Facebook's TOS even though the court thinks it's a browsewrap. Neither ruling is unprecedented, but both rulings represent a very favorable bounce for Facebook. Yet, for reasons I'll address in a moment, I'm not 100% clear why Facebook wanted this outcome.

Background. This is one of at least three publicity rights lawsuits brought over Facebook's Sponsored Stories. EKD was filed in the Southern District of Illinois. The other two I know of are JN v. Facebook (in EDNY) and Fraley v. Facebook (in N.D. Cal.). JN and EKD both involved children-users of Facebook as plaintiffs. The JN case was voluntarily dismissed last August. A related case, Cohen v. Facebook, related to Facebook's use of users' names/photos in Facebook's "friend finder" service. In October, Facebook won the Cohen case for lack of cognizable injury. In contrast, in December, in Fraley v. Facebook, the plaintiffs made substantial headway by surviving Facebook's motion to dismiss on Article III, 47 USC 230 and other grounds. [An update on the Fraley case: the court granted Fraley's request to drop out of the case. See 2012 U.S. Dist. LEXIS 34477 (N.D. Cal. March 13, 2012)].

In the EKD/Dawes case, Facebook sought to transfer the venue from S.D. Ill. to N.D. Cal. To do so, it needed the court to uphold the venue selection clause in its user agreement/TOS.

Disaffirmance. The court first addresses whether kids can be bound by Facebook's TOS under any circumstance due to the infancy doctrine, which says contracts with kids are generally voidable by the kids. The court says that kids can't have it both ways--either the contract applies in total or they must disaffirm it in total. Here, the kids haven't disaffirmed it totally because:

Plaintiffs have used and continue to use facebook.com. The Court concludes that Plaintiffs cannot disaffirm the forum-selection clause in Facebook’s TOS, although Plaintiffs were minors when they entered the agreement containing the clause.

This brings to mind the uncited AV v. iParadigms case, the leading kids-and-online-contract case to date. That case involved the plagiarism detection service Turnitin, whose contract with students purportedly let Turnitin retain copies of kids' papers in its database for future precedent checks. The court there said that the kids had received the "benefit" of Turnitin's service (i.e., it had already completed the plagiarism detection on their papers), so there was no way for kids subsequently to unwind the contract completely.

The EKD case differs because the court leaves open the possibility that the kids could void the contract by deleting their Facebook accounts. At the same time, deleting the account wouldn't help these particular plaintiffs because then Facebook would stop showing their names and photos in Sponsored Stories. It remains to be seen if other minor plaintiffs can take advantage of the hole this case doesn't address.

FWIW, kids and online contracts is a hot topic in the academic literature. See, e.g., From the Mouths of Babes: Protecting Child Authors from Themselves by Julie Cromer Young and CyberInfants by Cheryl Preston. I believe Farnaz Alemi has a forthcoming paper on the topic too. The authors of these papers can rest easy about any possible preemption from the opinion; I can't imagine this opinion resolves the issue dispositively.

Binding Nature of the TOS. Having established that the kids are capable of being bound to the Facebook TOS, the court then turns to whether the plaintiffs in fact assented to the TOS. The judge really makes a hash here. The court makes the unqualified statement that "Facebook’s TOS, including the forum-selection clause at issue, are contained in a so-called 'browsewrap agreement.'" This is just an unmitigated misunderstanding of what constitutes a browsewrap, reminding us of the intractable semantic ambiguity of that phrase. See the effectively identical error made in the uncited Fteja v. Facebook ruling from a couple months ago. Indeed, the court proves it knows that Facebook's TOS isn't a browsewrap. Later, the opinion says "persons wishing to join facebook.com must attest that they have read Facebook’s TOS, which are made available through a hyperlink." JUDGES: PLEASE PLEASE PLEASE RETIRE THE PHRASE BROWSEWRAP PERMANENTLY. It's not helping your analysis one bit.

Having made the factual error of calling the TOS a browsewrap, the judge makes a doctrinal error to cover up the factual error by concluding that browsewraps are enforceable. UGH. The court says "the validity of a browsewrap contract hinges on whether the website provided reasonable notice of the terms of the contract," which Facebook did by presenting the TOS as a clickthrough (the language quoted above) and because the TOS is linked in Facebook's footer on every page. Whether or not the users actually read the TOS becomes irrelevant because they had constructive notice.

After it determined the agreement is enforceable, the court says the venue selection clause is reasonable. Get this: the court then chides the plaintiffs for bitching about the venue selection clause's reasonableness because the "time for Plaintiffs to have considered whether the forum-selection clause in Facebook’s TOS would terribly disadvantage them was when they agreed to the TOS."

WHAT? First, the plaintiffs are minors, so by definition they lack legal sophistication to understand and then negotiate a standard form contract with a company that basically never replies to individual emails. Second, the court just said it was a browsewrap, which by definition means that they never "agreed" to it. COME ON.

Don't get me wrong, the judge got to the right policy result. Facebook shouldn't be dragged all over the country by lawsuits from minors. But the judge's doctrinal contortions to reach this result are painful.

Venue Transfer. Having concluded that the venue selection clause is valid and enforceable, the court then effectuates its provisions by transferring the case to Facebook's home court as the clause specifies.

Implications of the Transfer. Hey litigator friends, I could use your help assessing Facebook's move here. (I did ask Facebook for comments, but it declined). Facebook already had an adverse ruling in the highly similar Fraley case. Yet, instead of trying to get a more favorable result in a different circuit with potentially different law, Facebook has transferred this case into the same district where it suffered the interlocutory loss. Is this a good move or a puzzling one? On the one hand, by putting both cases in the same circuit, it increases the likelihood that a win in one will knock out the other (even if that win has to occur on appeal). On the other hand, it took the case out of a venue with uncertain outcome and put it into a venue where it knows it has a fight on its hands. So, litigator friends, does it make sense for Facebook to put all of the eggs in one basket, or should it have diversified its risks? If you email me, let me know if I can quote your email in an update to this post.

A timing note: Facebook filed the venue transfer motion a few weeks before the Fraley decision came out. However, surely it could have withdrawn the motion after that point if it had wanted to, and I doubt EKD would have resisted.

In an email, Venkat responded to my question:

Northern District of California judges see a ton of disputes involving Facebook, and they're probably viewed as somewhat more sophisticated in dealing with Facebook terms and privacy/publicity issues. Also, from an administrative/housekeeping standpoint, Facebook must feel more comfortable there so this may slightly weigh in favor of trying to proceed in California. From a substantive standpoint I can't think of any compelling reason to go there after getting bad precedent in a similar case. (I wonder how the statutes vary as far as the scope of substantive rights they provide. It's surprising this wasn't a bigger issue in the transfer discussion. I realize the classes may be sliced up depending on the type of rights they assert, but CA law provides for more favorable publicity rights in general?).

UPDATE: Rebecca emailed me: "Isn't the incredibly broad scope of Illinois RoP law of importance in the venue, even with a favorable choice of law clause substantively? I'd expect Illinois courts to be more RoP-friendly."

Posted by Eric at 01:38 PM | Licensing/Contracts , Publicity/Privacy Rights | TrackBack

March 15, 2012

Facebook Faces Jurisdictional Hurdle in its Trademark Lawsuit Against Faceporn--Facebook v. Pedersen

[Post by Venkat Balasubramani]

Facebook v. Pedersen, 10-Cv-04673 (N.D. Cal.; March 2, 2012)

Facebook sued Pedersen, a resident of Norway, alleging that Pedersen's use of the "Faceporn" mark infringed on and diluted Facebook's trademarks. After the complaint was filed, Pedersen transferred ownership of the Faceporn website to Retro Invent, a Norwegian entity. The defendants were served via the Hague Convention, and when they failed to timely respond, Facebook moved for a default judgment. The court issued a show cause order directing Facebook to demonstrate that assertion of personal jurisdiction over Pedersen and Retro Invent was proper. (Here is my blog post flagging this order: "Facebook's Trademark Enforcement Effort Against 'Faceporn' Hits Jurisdictional Snag.") The magistrate judge finds that Facebook's response to the show cause order was insufficient, and he recommends that the lawsuit be dismissed for lack of personal jurisdiction.

Facebook relied on a broad argument that Faceporn intended to target Facebook and competed with Facebook for customers; therefore, under Calder's effects test, personal jurisdiction was proper. The subtext of Facebook's arguments is that "Facebook has a world famous mark and someone who infringes on Facebook's trademark even in a foreign jurisdiction must know that they are harming a California corporation." The court says that there is one problem with this argument: there is no evidence that Facebook and Faceporn compete in any way. As the court notes:

Facebook has not alleged any facts that support the notion that defendants have garnered any revenue from their operation of Faceporn at Facebook's expense or that Faceporn has diverted any of Facebook's potential customers. Instead, Facebook states conclusorily that defendants operate Faceporn "with a bad faith intent to profit" from Facebook's marks, but it alleges no facts to suggest that Faceporn has profited at all at Facebook's expense.

Ouch.

Facebook has been pretty active on the trademark front, suing among other sites Lamebook ("Lamebook Faces Down Facebook") and Teachbook ("Facebook's Trademark Suit Against Teachbook Survives Motion to Dismiss"). Interestingly, in both of these cases, Facebook was unsuccessful in having the dispute heard on its home turf. It lost a motion to transfer the Lamebook case (this lawsuit settled) and lost a jurisdictional motion in the Teachbook case (Facebook refiled that lawsuit in Illinois and the Illinois court rejected Teachbook's motion to dismiss).

Personal jurisdiction decisions are so idiosyncratic that they're not worth spending much time on. But it's interesting that the Mavrix case (where the Ninth Circuit held that locally targeted advertising can support the assertion of jurisdiction) has been cited at least a couple of times in orders granting motions to dismiss. It's also interesting that the court raises the personal jurisdiction issue in this case sua sponte. Maybe the Northern District of California judges are starting to see a pattern of overzealous enforcement efforts on Facebook's part?

Previous posts:

"Facebook's Trademark Suit Against Teachbook Survives Motion to Dismiss"
"Facebook's Trademark Enforcement Effort Against 'Faceporn' Hits Jurisdictional Snag."
"The 9th Circuit Tackles a Pair of Internet Jurisdiction Cases" (discussing Mavrix Photo)

Posted by Venkat at 11:09 AM | Trademark

March 13, 2012

TheDirty Gets Its First 47 USC 230 Win--S.C. v. Dirty World

By Eric Goldman

S.C. v. Dirty World LLC, No. 11-CV-00392-DW (W.D. Mo. March 12, 2012)

thedirty got a 47 USC 230 immunity--the first time it has qualified for Section 230--in the lawsuit by Stephanie Crabtree (S.C.). This isn't thedirty's first court victory; it won the Dyer and Gauck cases on the substantive claim elements, not on Section 230. In contrast, in January the Jones case denied a Section 230 immunity for thedirty, and this cast doubt on its immunity eligibility. Not only does this ruling vindicate thedirty's eligibility for 47 USC 230, but the opinion even explains why the Jones opinion is wrong.

As usual, this case involves a user's submission of a post and photo to thedirty. Nik Richie, thedirty's principal, approved the post for publication and added his usual derogatory snark about the situation. Richie is legally responsible for his snark, but in this case it's clearly not tortious. Instead, the lawsuit seeks to hold thedirty accountable for the third party material it published. As we know, stated that way, the immunity should apply clean and decisively.

Adopting the Accusearch definition of "development," the court says a website "develops" third party content (and thus loses the immunity) if the website "contributes materially to the alleged illegality of the conduct." The court gives two examples of this disqualifying behavior:

1) requiring or paying for the submission of illegal information
2) editing third party content to change its meaning (i.e., editing out the word "not" from a factual statement)

The element of "requiring" the submission of illegal content is a variation of the Roommates.com standard. The Roommates.com standard has proven unexpectedly defense-favorable, although the Roommates.com denouement showed the illogical of determining content illegality as part of an immunity determination. (I also made this point with the StubHub ruling from last week).

However, the "paying for illegal content" element is a dangerous bastardization of Accusearch. Many websites pay for UGC--for example, Epinions does, and so does YouTube. I don't think the court means to say that paying for UGC automatically forecloses Section 230 immunity for that content (and I think several cases have found Section 230 immunity in those situations), but just like the StubHub ruling, the loose language will inspire yet more plaintiffs. Sigh.

Applying the standard, the court says thedirty didn't "develop" the third party content:

it is undisputed that the Church Girl Post was unilaterally drafted and submitted by a third-party. The Defendants have further established that (a) they did nothing to induce a post specifically directed at the Plaintiff; (b) Richie does not personally know and has never knowingly spoken to the author of the Church Girl Post; (c) Richie had never heard of the Plaintiff prior to commencement of this action; and (d) the Defendants did not add to or otherwise alter the substance of the post. In addition, the Website does not require the posting of actionable material, and it does not pay for such information.

The plaintiff tried a few other arguments to defeat the Section 230 immunity:

* Richie "hand select[ed] those juicy tidbits of trash that are titillating to the public." Citing Zeran, the court says Section 230 protects these editorial choices.
* having "the Dirty Army" and a category called "Would You?" constitutes content development. Just like the StubHub case, the court says that website architecture isn't relevant to Section 230 analysis; the legal analysis should focus on the handling of the specific post in question.
* thedirty "encourages" people to post dirt. Citing Furber and Shiamili, the court says "merely encouraging defamatory posts is not sufficient to defeat CDA immunity." Plus, the site has other categories that aren't focused on dirt.

Finally, the court discusses the Jones precedent. The court tries to distinguish the cases factually, which I didn't find persuasive. The court says that in Jones, Richie's snark related to the user's allegedly defamatory statement, while in this case Richie's snark was just a derogatory reference to her appearance. Also, Richie removed this post in question, which he didn't do in the Jones case. The latter fact contravenes Zeran's teaching that Section 230 applies to a website's decision to "withdraw" content, and of course many cases have emphatically stated that Section 230 applies even if the website receives a takedown notice and ignores it. So I don't know what the judge was thinking here, but there you go.

Fortunately, the judge doesn't just rely on the factual differences; the opinion also denigrates the Jones ruling. It says the Jones opinion "appears to adopt a relatively narrow interpretation of CDA immunity," which conflicts with the "broad" immunity interpretations in the 8th Circuit (see the Johnson case). The court also says the Jones opinion shouldn't have considered the website's name because Section 230 analysis should be based on the handling of the specific UGC item.

The court ends with an odd admonishment:

to avoid any confusion–the Court disagrees with the Defendants’ apparent belief that they are immune for any and all postings on their Website. Instead, the Court simply holds that the Defendants are entitled to immunity under the facts of this case.

Three meta-observations about Section 230 litigation in light of some interesting parallels between this ruling and the StubHub ruling last week:

1) Both courts got to the right result but used unnecessarily sloppy language to get there, which will spur even more unmeritorious lawsuits. I wish judges wouldn't reinterpret the standards so freely. It makes everyone's lives so much more difficult.

2) Both courts expressly rejected plaintiffs' efforts to attack the website's architecture, instead requiring plaintiffs to show how the specific post in question lost its status as third party content.

3) It's disconcerting to see both courts parsing the meaning of the word "development" as the immunity's linchpin. After the Roommates.com train wreck, it's clear that no one knows what the word "development" means. While the SC and StubHub opinions both get to a decent place, the more often that courts play around with the meaning of the term "development," the more likely it is that we'll see goofy defense losses. Defendants, if you're fighting the Roommates.com battle, please try to get courts to focus on this standard from Roommates.com: “The message to website operators is clear: If you don’t encourage illegal content, or design your website to require users to input illegal content, you will be immune.”

Under that standard and any other reasonable interpretation of Section 230, thedirty qualifies for Section 230 immunity for third party content it republishes. Honestly, that's not even a close question. This reinforces the Jones case was wrong, and it should be reversed on appeal. I hope the appellate court fixes the obvious error.

Posted by Eric at 09:03 AM | Derivative Liability | TrackBack

March 12, 2012

Jan.-Feb. 2012 Quick Links, Part 5 (Advertising, Consumer Reviews & Search Engines)

By Eric Goldman

Advertising and Marketing

* CLRB Hanson Industries, LLC v. Weiss & Associates, PC, 2012 WL 20539 (9th Cir. Jan. 5, 2012). Ninth Circuit rejected a challenge to the CLRB Hanson v. Google settlement over AdWords budget caps. Prior blog post.

* Facebook is rolling out Sponsored Stories in users' newsfeeds, while making the disclosure incredibly opaque by calling it "featured" (with an additional disclosure that shows when users mouse over the word). Between this spamming of users' newsfeeds and the MySpace-ification of Facebook via its Timeline UI, Facebook is making it harder and harder to actually use the site to communicate with each other (which, Facebook might have forgotten, WAS THE WHOLE POINT).

* Facebook v. Adscend Media complaint over "likejacking."

* Rebecca on the injunction in the Fresh Step kitty litter case.

* The FTC's settlement with Upromise is a deja vu to the old adware wars of the last decade. Prior blog post on the adware wars.

Consumer Reviews

* Britain's ASA says TripAdvisor can't make claims ""Reviews you can trust", "... read reviews from real travellers", "TripAdvisor offers trusted advice from real travellers" and "More than 50 million honest travel reviews and opinions from real travellers around the world"" because it has fake reviews on its site.

* EFF brought a declaratory judgment action for LawyerRatingz based on 47 USC 230.

* Law firm sues the BBB over an adverse rating. Compare CHW Group, Inc. v. Better Business Bureau of New Jersey, Inc., 2012 WL 426292 (D.N.J. Feb. 8, 2012) (dismissing a Lanham Act false adverting claim against BBB for an allegedly bogus letter grade).

* Rebecca on a litigation battle over fake consumer reviews.

Search Engines

* Danny Sullivan: 2011: The Year Google & Bing Took Away From SEOs & Publishers

* Google is bundling Gmail and Google+ accounts; is this a way of padding the number of Google+ accounts, or forcing people to take Google+ accounts who don't want them?

* The "Focus on the User" website provides some evidence that the Google+ integration into search may not be in users’ best interest.

* PandoDaily: "Larry Page to Googlers: If You Don’t Get SPYW, Work Somewhere Else"

* Search Engine Land: An Interview With A Google Search Quality Rater. Prior blog post.

* A Microsoft-sponsored event to attack Google sours one European member of Parliament.

* Bing presents integrated results similar to Google's Universal Search, even though Microsoft fronted groups have raised antitrust concerns about Google doing so.

* Reagan-era FTC chairmen (and Google consultants) tell the FTC to back off Google.

* Polls like this are interesting and probably unreliable:

87 percent agreed with the statement “I feel I can easily switch to a competing search engine if I’m not happy with the results I receive;” just 8 percent said they were “stuck with using a particular search engine and don’t have the ability to switch.”

Respondents were then asked whether “the federal government should regulate the content and appearance of search engines and their results.” A whopping 79 percent strongly or somewhat disagreed with this idea, compared to 12 percent who strongly or somewhat agreed. The depth of opposition was striking – 64 percent strongly disagreed versus just 3 percent who strongly agreed.

Participants were presented with arguments about more enforcement of federal antitrust laws, and then asked to choose which statement was most true. A massive 76 percent agreed that “More government involvement and regulation will make the Internet worse for consumers,” while just 8 percent thought that such involvement and regulation “will make the Internet better for consumers.”

* Custom Led v eBay complaint: alleges that eBay didn't give the promised priority in search results for eBay Motors "Featured Plus" listings.

* Scroogle is dead. I tested on Scroogle in my 2005 Internet Law exam (see also the sample answer).

Posted by Eric at 04:57 PM | Marketing , Search Engines | TrackBack

Another Newspaper Isn't Liable for User Website Comments Per 47 USC 230--Spreadbury v. Bitterroot Library

By Eric Goldman

Spreadbury v. Bitterroot Public Library, 2012 WL 734163 (D. Montana March 6, 2012). Magistrate's Findings and Recommendations from November 2011 (Spreadbury v. Bitterroot Public Library, 2011 WL 7462038 (D.Mont. November 30, 2011). The Justia page.

It's not easy to predict what will set off a pro se litigant. Just recently I blogged about Kanal Gaston's serial litigation triggered, in part, by a missing sex toy. The facts underlying today's litigation started when Michael Spreadbury asked his local library to add an item to its collection, and the library refused. (It's not entirely clear what the item in question is, but I believe it's a letter written by another local resident to President Obama). The situation spiraled downward such that the library banned Spreadbury from its premises, so naturally the next stop was the courthouse. Spreadbury (as a pro se litigant) has sued what seems like half of Montana and, in less than a year, has helped generate a PACER docket of over 250 entries.

The county newspaper, the Ravalli Republic, has covered Spreadbury's situation extensively (see its archives). Spreadbury sued the newspaper publisher Lee Enterprises for defamation based on one of the stories as well as user comments. In this opinion, the court easily dismisses Lee Enterprise's liability for web users' comments to the article per 47 USC 230:

Through its website, Lee Enterprises provides an “interactive computer service,” 47 U.S.C. § 230(e)(3), that “enables computer access by multiple users to a computer server.” Collins, 703 F .Supp.2d at 878 (holding that a newspaper cannot be held liable for postings by third parties on its website) (quoting DiMeo v. Max, 248 Fed. Appx. 280, 282 (3rd Cir.2007)). The website is a “neutral tool” and offers a “simple generic prompt” for subscribers to comment about articles. Fair Housing Council, 521 F.3d at 1162, 1174. Lee Enterprises does not develop or select the comments, require or encourage readers to make defamatory statements, or edit comments to make them defamatory. See Collins, 703 F.Supp.2d at 878; Miles v. Raycom Media, Inc., Slip Copy, 2010 WL 3419438, *2–3 (Aug. 26, 2010 S.D. Miss.)(holding that a newspaper is not liable for comments posted by third parties on its website). Accordingly, I agree with Judge Lynch that Lee Enterprises is entitled to summary judgment on Spreadbury's claims that are predicated on third-party comments.

As I've indicated before, Section 230 would apply even if the newspaper did more than act a "neutral tool." Indeed, you may recall my comprehensive blog post on newspapers' liability for users' comments, which showed that newspapers consistently get Section 230 immunity for users' defamatory web comments. Also see my post on the Delle case, a more recent entry in the genre.

Posted by Eric at 08:48 AM | Content Regulation , Derivative Liability | TrackBack

March 11, 2012

Jan.-Feb. 2012 Quick Links, Part 4 (Evidence Edition)

By Eric Goldman

* E.E.O.C. v. Management Hospitality of Racine, Inc., 2012 WL 37112 (7th Cir. Jan. 9, 2012): "The Defendants also suggest that Shisler was not subjectively offended by Gutierrez's crude comments because her MySpace page contained a sexually graphic video of young males masturbating in the presence of young females, and contains the comment, “funny as hell.” The jury was entitled to disregard this video as evidence that Shisler did not find Gutierrez's comments to be offensive. As the district court observed, “sharing jokes with friends in an online community is vastly different than being propositioned for sex by a supervisor at work.”"

* In re Google Inc., 2012 WL 371913 (Fed. Cir. Feb. 6, 2012): "Google notes that the email contained the words “Google Confidential” and “Attorney Work Product.” Lindholm's expectations regarding confidentiality, however, do not demonstrate entitlement to the privilege in light of the remainder of the email.

* Turner v. State, 312 Ga. App. 315 (Ga. App. Ct. Nov. 1, 2011). Rape shield law precludes the introduction of evidence from MySpace.

* Farkarlun v. Hanning, 2012 WL 684027 (D. Minn. March 2, 2012):

With respect to the pages of internet blogs and Star Tribune articles, they are irrelevant because no foundation has been offered from which to infer that Lanasa or Lee ever saw the posting or articles. No evidence has been offered that Lanasa or Lee read the blogs from which pages were reproduced. No evidence has been offered that Lanasa or Lee read the Star Tribune. Therefore, the evidence offered by Farkarlun is not probative in any way of Lanasa and Lee's knowledge of rape allegations, and is inadmissible....Furthermore, nothing has been offered from which to infer that the portions of Star Tribune articles reproduced on the blog were in fact accurately reproduced. Evidence must be authenticated or identified, i.e. the proponent of the evidence be able to establish the evidence is what its proponent claims it is....An anonymous internet blogger cannot verify the authenticity of the articles through an unsworn, out-of-court statement. Such a statement is hearsay if offered to authenticate the source of the article....

Farkarlun also seeks to admit a posting from an internet blog including the substance of an email from MPD Sergeant Jesse Garcia (“Garcia”). That email is also inadmissible. As with the other blog postings, it lacks any relevancy because no evidence suggests Lanasa or Lee ever saw the email. That the email is addressed to “All” does not mean that the email was sent to every single person Garcia may know. Nearly any email that is sent to multiple recipients may be addressed to “All.” Only knowledge of the recipients will elucidate what group or class constitutes “All.” Here, the recipients of the email are not disclosed and no evidence links the “All” to either Lanasa or Lee. Furthermore, the email lacks foundation. Nothing suggests it was accurately reproduced or that it was in fact written by Garcia. To the extent Farkarlun relies on the representations of an anonymous blogger as the sole foundation to establish the email was written by Garcia, the statement is hearsay and inadmissible. Fundamental to our judicial system is that liability or guilt will be determined only through the use of relevant and reliable evidence. The blog postings offered by Farkarlun are not reliable or relevant to establish whether Lanasa or Lee knew of Farkarlun's rape allegations.

* EFF: “A Tale of Two Encryption Cases,” explaining the seeming inconsistency between US v. Fricosu (a person can be compelled to decrypt material for prosecutors) and USA v. Doe (a person who had encrypted his drive using Truecrypt could not be compelled to decrypt the hard disk).

Posted by Eric at 05:48 PM | Evidence/Discovery | TrackBack

Jan.-Feb. 2012 Quick Links, Part 3 (Defamation/Content Regulation Edition)

By Eric Goldman

Defamation

* McKee v. Laurion, No. A11-1154 (Minn. App. Ct. Jan. 23, 2012) The appeals court revived a doctor's defamation lawsuit over online criticism. Prior blog post on doctors' lawsuits over online criticism.

* Schimmel v. YouTube, Inc., 2012 WL 280703 (N.Y. Sup. Ct. Jan. 30, 2012). In a lawsuit over allegedly defamatory YouTube videos, the plaintiffs (wisely) voluntarily drop YouTube as a defendant.

* Support Group of the Holy Synod of the Ethiopian Orthodox Tewahedo Church v. Automattic, 1:12-cv-00249-BAH (D.C. D.C. complaint filed Feb. 15, 2012). Church group sues Wordpress for allegedly defamatory user blog. Hello 47 USC 230! The blog at issue.

* Penachio v. Benedict, 2012 WL 10971 (2d Cir. Jan. 4, 2012): "New York courts do not interpret “transacting business” to include “defamatory utterances” sent into New York state, unless the conduct also included “something more.”...Here, Penachio and Carr argue that the “something more” was established because Benedict and Van Pelt had been physically present in New York for a guardianship proceeding, had contacted New York residents by email and telephone, and had called upon New Yorkers to respond to their YouTube videos. However, this argument is foreclosed."

Content Regulation

* thedirty appealed its Section 230 loss in Jones v. Dirty World, setting up what may be the most important (and dangerous) Section 230 showdown in a federal appellate court in several years. Prior blog post.

* Meanwhile, the lawsuits against thedirty keep coming, including Hare v. thedirty and Doe v. thedirty.

* Deer Consumer Products, Inc. v. Little, 2012 WL 280698 (N.Y. Sup. Ct. Jan. 27, 2012). Stock trader/griper not automatically subject to NY jurisdiction even though his LinkedIn page references a NY domicile, but court orders jurisdictional discovery. The trader also loses his bid to litigate pseudonymously, but the court specifies a protective order. Prior blog post on this case.

* Lyrissa Lidsky on regulatory overreactions to cyberbullying.

* Barnes v. Zaccari, 2012 WL 373316, (11th Cir. Feb. 7, 2012): "Zaccari says that Barnes engaged in threatening behavior. But Barnes's Facebook collage, emails, and letter—when viewed in the light most favorable to him—reveal a student who is passionate about environmental issues, but do not require an inference that Barnes intended to harm someone. Zaccari claims that his name connected to the word “memorial” in Barnes's Facebook collage suggests that Zaccari would soon be dead. But reasonable minds could differ. Several university officials contemporaneously viewed the collage and concluded it was not threatening. And the Director of the VSU Counseling Center, Dr. Victor Morgan, told Zaccari that the collage was not a threat."

* Brain Research Labs, LLC v. Clarke, 2012 WL 239578 (Cal. App. Ct. Jan. 26, 2012). Lawyer's YouTube video to prospective clients about a dietary supplements lawsuit covered by anti-SLAPP, but the plaintiff established its prima facie case enough to avoid dismissal.

* Lengthy story about the litigation practices of Melaleuca's founder, Frank VanderSloot. EFF coverage. Blog coverage of Melaleuca. Another good reason to support federal anti-SLAPP legislation.

* Facebook's content abuse standards.

* Blogger doesn't qualify for Illinois shield law.

* Rubino v. City of New York, 2012 WL 373101 (N.Y. Sup. Ct. Feb. 1, 2012). A teacher fired for implying on Facebook that she hoped her students would die was reinstated: "with Facebook, as with social media in general, one may express oneself as freely and rapidly as when conversing on the telephone with a friend. Thus, even though petitioner should have known that her postings could become public more easily than if she had uttered them during a telephone call or over dinner, given the illusion that Facebook postings reach only Facebook friends and the fleeting nature of social media, her expectation that only her friends, all of whom are adults, would see the postings is not only apparent, but reasonable."

* California's defense of the violent video games law cost taxpayers nearly $2M. Yay for us!

* Mandatory graphic images on cigarette packages violates the First Amendment.

Posted by Eric at 11:36 AM | Content Regulation | TrackBack

March 10, 2012

Justin.tv Mostly Eliminates Zuffa's Trademark and Communications Act Claims Over User-to-User Live Video Streaming

By Eric Goldman

Zuffa LLC v. Justin.tv, Inc., 2012 WL 764424 (D. Nev. March 8, 2012). The complaint.

[Note: I've worked with Justin.tv on related issues, but I'm speaking for myself in this post]

Justin.tv allows user-to-user live video streaming. Zuffa runs the Ultimate Fighting Championship, which broadcasts pay-per-view fights. This lawsuit relates to the UFC 121 Lesnar v. Velasquez pay-per-view fight from October 2010, which Justin.tv users rebroadcast. Zuffa sued Justin.tv for a variety of claims. In this ruling, Justin.tv successfully dismisses most of the trademark claims and all of the Communications Act claims.

Trademark. Justin.tv argued that Zuffa's trademark claims were Dastar-ed. The court partially disagrees because Zuffa wasn't claiming reverse passing off. Nevertheless, Dastar wipes out Zuffa's claims about any trademarks actually embedded in the video stream, such as Zuffa's trademarked Octagon fighting ring, because trademarks would allow Zuffa to control the copyrighted material even after the copyright term expired. Instead, "the Court limits Zuffa’s trademark claims only to the display of Zuffa’s trademarkswhich are not an inherent part of the video broadcast." Whatever that means...! In a footnote, the court also "expresses extreme doubt" about Zuffa's trademark inducement claim.

Communications Act. Zuffa's claims relate to the "stealing cable" provisions. Justin.tv claimed that 47 USC 230 applies, a pretty logical argument given that Zuffa is bringing a non-IP claim against Justin.tv for third party content. However, the court sidesteps the Section 230 issue, saying it's never been applied to the Communications Act (true) and that the court couldn't find any analogous "stealing cable" claim against websites, and it didn't want to touch this "novel" issue.

Instead, the court dismisses the "stealing cable" claim on its elements. The court says:

In essence, Zuffa alleges that Justin.tv’s users copied Zuffa’s UFC event and then rebroadcast the UFC event over the internet. This is not the type of conduct properly addressed by the Communications Act, but by copyright law (and, potentially, trademark law) because Justin.tv had no relationship with the original cable or satellite signal: by the allegations, Justin.tv did not receive or intercept any actual cable or satellite signal or broadcast. The Court finds no evidence in the statutory language, other cases, or legislative history that the Communications Act addresses this type of conduct or was meant to bolster or act as a separate type of copyright claim.

In a footnote, the court notes the troubling implications of Zuffa's argument:

if the Court were to allow claims such as these, it would have to allow similar Communications Act claims against scores of “cloud computing” service providers such as Microsoft, Apple, Google, Amazon.com, Dropbox, Box.net, and others because Jusint.tv’s [sic] particular streaming service would be irrelevant. As an example, say a person took a snippet (or longer) of video of a UFC match being broadcast on their television with their iPhone, Windows Phone, etc. The iPhone then automatically uploads that video to one of dozens of cloud storage systems such as Apple’s iCloud. The Court refuses to find that Apple (or Microsoft, etc.) would be liable under the Communications Act for merely receiving and storing this data under the Communications Act. Yet, Zuffa arguesfor exactly this result when it argues that Justin.tv’s mere receipt of this video stream makes Justin.tv liable. In passing the Communications Act, Congress did not intend such a result, and this Court will not broaden the effect of the statute in this manner.

Amen!

At its core, the lawsuit is about copyright infringement, and Justin.tv didn't attempt to dismiss that claim. So the case hasn't gotten to the real meaty claim yet. It's my (presumably biased) position that Justin.tv should clearly qualify for the 512(c) safe harbor.

Posted by Eric at 10:52 AM | Copyright , Derivative Liability , Trademark | TrackBack

March 09, 2012

Group Text Services Grapple with TCPA Class Actions

[Post by Venkat Balasubramani]

Pimental v. Google Inc., No. 11-2585 (N.D. Cal.; Mar. 2, 2012)

Plaintiffs sued Google (and Slide), asserting that text messages sent via the “Disco” service offered by Google violated the Telephone Consumer Protection Act.

As I understand it, Disco allows anyone to create a group for group text messaging purposes. According to the complaint, any time someone’s number is added to the group, Google sends out a service advertising its Disco services:

Disco is a group texting service. Standard SMS rates may apply or chat for FREE w/ our app – http://disco.com/d . . .

Plaintiffs sued for TCPA violations, but alleged that the messages sent by Disco violated the TCPA (they did not sue for the underlying texts).

The court rejects Google’s motion to dismiss, noting that the TCPA only requires that the text message be unsolicited (sent in the absence of prior express consent or pursuant to another exception) and sent using equipment that has the capacity “to store or produce telephone numbers to be called, using a random or sequential number generator.” Citing to the Ninth Circuit’s decision in Satterfield v. Simon and Schuster, the court says that plaintiffs’ allegations are sufficient to state a claim under the TCPA.

Defendants also raised a First Amendment argument, saying that the text messages were “informational” in nature. As with First Amendment arguments in spam litigation generally, the court was skeptical of this argument.

Glauser v. Twilio, No. C 11-2584 PJH (N.D. Cal.; Jan. 27, 2012)

A separate class action involved Twilio and GroupME, who were sued in a putative class action alleging TCPA violations. In that case, defendants successfully moved for a stay pending resolution of the FCC’s rulemaking procedures around TCPA issues. Because the FCC was considering rules clarifying (1) what constitutes an “auto-dialer” for TCPA purposes; (2) the scope of the prior express consent exception; and (3) the applicability of the “common carrier” exception to liability under the TCPA, the court granted a stay. Although the court has not lifted the stay, plaintiff recently filed a notice of decision from the FCC, and argued that as to GroupMe, the stay should be lifted, and the FCC’s rulemaking did not affect GroupMe’s liability. The court has not considered whether to lift the stay, but if plaintiff is correct, it looks like the lawsuit will go forward with respect to GroupMe. Interestingly, plaintiff did not seek to have the stay lifted as to Twilio.
__

I took a quick look at the FCC’s final regulations, and nothing in the rules offer much of an out for group text messaging services. With respect to the equipment used and the type of consent that is required, the final regulations do not seem to change much. Given the stringent nature of the TCPA rules (as articulated by Satterfield and other cases), those who send text messages are advised to procure consent through means other than the initial text message informing recipients that they can opt-out from receiving further texts. Also, this did not come through in the court orders resolving the claims against Disco or Twilio, but group texting services suffer from the flaw that they can be used by spammers, absent adequate validation measures. I haven’t seen a validation mechanism that is foolproof, and the best approach is to procure consent over the web or through some other means before any texts are sent (e.g., if you sign me up to receive texts, tell me to go to a website and validate my phone number, and only after this validation is complete should I receive texts). Courts seem warm to the idea that even the initial text saying people can opt-out from receiving further texts is sufficient to create TCPA liability, and nothing in the statute says otherwise.

The platforms may also have a viable section 230 defense if they provide "interactive computer services." Given the broad definition of interactive computer services, they should qualify, but only as to messages sent by third parties. The lawsuit against Slide is aimed at texts sent by the Slide service (arguably automated and triggered by other users of the services), so Slide probably has a tougher argument to make based on Section 230. To the extent the claims are based on text messages transmitted by customers, Section 230 should come into play.

Other coverage:

Jeff J. Roberts (PaidContent/Giga): "Spam Lawsuits Weigh On Twilio, Group Texting Apps"

Posted by Venkat at 05:30 PM | Spam

Fake Political Attack Video Doesn't Violate Lanham Act--Ron Paul v. Does

By Eric Goldman

Ron Paul 2012 Presidential Campaign Committee, Inc. v. Does, 3:12-cv-00240-MEJ (N.D. Cal. March 8, 2012)

The Doe Defendants registered the alias “NHLiberty4Paul" at YouTube and Twitter and posted a YouTube video attacking Jon Huntsman. The video ends "American Values and Liberty – Vote Ron Paul." The Does acted without Paul's permission--so much so that Paul sued them for violations of the Lanham Act and defamation. After filing the lawsuit, Paul sought to unmask the Does.

The court denies the unmasking request because Paul's Lanham Act claims weren't valid. (By doing so, the court sidesteps a battle over which of several different legal standard should govern the unmasking request). The federal court then declines to exercise supplemental jurisdiction over the state-law defamation claim.

The lawsuit's subject matter is a fake political video. It's "selling" a candidate (or, more accurately, trying to improve the competitive posture of candidate A by degrading the attractiveness of rival candidate B), but it's not selling anything commercial. Rebecca explained this when the complaint was first filed. Because the Lanham Act governs commercial activity, not political activity, it's clearly inapplicable to this situation.

To try to salvage the situation, Paul tries two mockable arguments. First, he argues that YouTube and Twitter are commercial sites, and that gives the dispute enough commerciality. The court rightly points out that the inquiry is about the defendant's conduct, not the websites where it took place, and notes the argument's illogic would mean non-commercial activity on any commercial website would be governed by the Lanham Act. In a footnote, the court adds that "using another company’s commercial website to post a comment or video is just far 'too attenuated' to result in an individual’s own conduct automatically meeting the Lanham Act’s commercial use requirement."

Second, Paul argues that "the video was intended to frustrate Plaintiff’s fundraising efforts and increase the amount of money contributed to Presidential nominees other than Ron Paul." The court says the Lanham Act is predicated on the defendant trying to improve its competitive status, and these defendants had no competing services; and the video on its face didn't try to solicit any donations.

In this case, it seems likely that the Does would suffer extra-judicial punishment if their identity gets revealed, irrespective of the case's merits. Kudos to the judge for aggressively gatekeeping the unmasking request rather than just rubber-stamping it. (Venkat emailed me: "I wonder if N.D. Cal. Judges are savvier at screening out these types of issues since they must deal with so many request to unmask.").

This case also reinforces that the Lanham Act is not designed to regulate fake content or consumer confusion about the source of content injected into the information ecosystem. But that makes me wonder if other reputation-protective legal doctrines might apply better, including defamation (kicked to the state court) or perhaps California's recent e-personation statute.

Some related posts:

* Reputation Management Lawsuit Is Shot Down--Bernard v. Donat
* Court Smacks Down Koch Industries' Attempt to Shut Down Satirical Website -- Koch Industries v. Does
* Griping Patient Goes Too Far Posting Fake Content in Doctor's Name--Eppley v. Iacovelli

Posted by Eric at 08:20 AM | Content Regulation , Marketing , Trademark | TrackBack

March 08, 2012

Jan.-Feb. 2012 Quick Links, Part 2 (Trademarks, Patents, Trade Secrets, Innovation Edition)

By Eric Goldman

Trademarks

* Naked Cowboy v. CBS, 2012 WL 592539 (S.D.N.Y. Feb 23, 2012). The court rejects the trademark claim for CBS buying "Naked Cowboy" keyword advertising to promote the YouTube video for lack of use in commerce, citing Merck v. Mediaplan, which I thought was dead after Rescuecom. CBS's reference to "Naked Cowboy" in its YouTube video title was a non-trademark use. Rebecca's coverage.

* Lovely Skin, Inc. v. Ishtar Skin Care Products, LLC, 2012 WL 379930 (D. Neb. Feb. 6, 2012). Lovely Skin sued Livelyskin for trademark infringement. Livelyskin claimed unclean hands because Lovely Skin bought Livelyskin as keyword ad triggers. The court refuses summary judgment and holds the issue over for trial.

* Neeley v. NameMedia, Inc., 2012 WL 470155 (8th Cir. February 15, 2012). Affirming dismissal of this odd case.

* Paul Keating rips a UDRP ruling over hardwareresources.org.

* Louis Vuitton sent an ill-advised and condescending cease & desist letter to University of Pennsylvania's IP students for using a parody LVMH logo to promote their fashion law conference. UPenn told LVMH to pound sand. Law.com coverage. Jonathan Pink’s analysis (with a funny Star Wars reference).

* TechCrunch: New Trademarkia Feature Exposes Biggest Trademark Bullies; Apple, Zynga Among Top Five

* Trademark Reporter published my remarks about trademark law's past/future. Prior blog post.

Patents

* Who's most excited about Facebook's IPO? Patent lawyers!

* Is Microsoft laying down its patent weapons?

* We've just hired a new patent professor at SCU, Brian Love. In an op-ed, he explains why university patent portfolios are a bad deal for everyone--including the university!

Trade Secrets

* Aqua Connect, Inc. v. Code Rebel LLC, No. 2:11-cv-05764-RSWL-MAN (C.D. Cal. Feb. 15, 2012). User downloaded trial software and agreed to a EULA restricting reverse engineering. The user reversed engineered anyway. The court dismissed the trade secret misappropriation claim, but the breach of contract claim remains.

* SocialApps, LLC v. Zynga, Inc., 2012 WL 381216 (N.D. Cal. February 6, 2012). Lawsuit that Zynga ripped off app developer mostly survives a motion to dismiss.

* All Things D: Raj Abhyanker (of Trademarkia infamy) dropped his idea theft suit against Nextdoor.

* Salon: The Internet makes magic disappear.

Innovation

* My colleague Kyle Graham has posted a really interesting article on how tort law responds to technological innovations: "Of Frightened Horses and Autonomous Vehicles: Tort Law and its Assimilation of Innovations"

* NYT: Apple's success has translated into manufacturing jobs overseas. As Steve Jobs answered to Pres. Obama when asked about getting those jobs into the US, “Those jobs aren’t coming back.” Instead, as we transition to a knowledge economy, the US has to develop a skilled labor force that can add enough value to justify the high cost-of-living here.

* William M. Fischer, The Utah Bioprospecting Act of 2010: (Unintentional) State-Level Implementation of the United Nations Convention on Biodiversity, Journal on Telecommunications & High Technology Law, Winter 2012. Prior blog post.

* NYT: Bell Labs as an exemplar of the value of "slow" development cycles. Some of its strengths: face-to-face interactions of cross-disciplinary teams of experts, a building designed to get people to encounter each other, an emphasis on applied research, physical proximity of researchers to the manufacturing facilities to facilitate two-way learning, and sufficiently long innovation timelines.

* WSJ: Target is trying to fight showrooming by having manufacturers create Target-specific brands, a technique that has worked to curb price comparisons in some categories, like mattresses and tires. Will Target's move lead to product proliferation? Or will some entrepreneur simply help link the retailer-specific items so that they can be easily price-compared? FWIW, I rarely worry about price comparison at Trader Joe's, even with respect to private-labeled goods, because they have repeatedly proven to me that they give me good value. If Target isn't working to ensure good value for consumers from product differentiation, I don't see how their move will help.

Posted by Eric at 09:36 AM | Patents , Trade Secrets , Trademark | TrackBack

March 07, 2012

By Eric Goldman

Copyrights

* The inside story of Veoh's destruction:

The company that we had built, that was once valued at over $130 Million was gone. Along with it went the livelihoods of over 120 people and their families, $70 million of money entrusted to us by investors, and a big part of me. I had sacrificed so much to live the life of an entrepreneur. My marriage couldn't stand the strain of this lifestyle and ended in 2009, and while all of this was going on, my father was dying. Instead of spending time with him at his bedside, I was sitting in depositions with lawyers, and stressing over the lawsuit.

Prior blog posts on Veoh, including the post on UMG v. Shelter Capital, where I wrote: "This case's real result is that Veoh is legal, but Veoh is dead—killed by rightsowner lawfare that bled it dry."

* Oracle rejected the $272M remittitur in Oracle v. SAP. GOBOGH! Prior blog post.

* The district court refused a preliminary injunction in Capitol v. ReDigi involving the resale of "used" digital tracks.

* Obodai v. YouTube LLC, 2011 WL 6880734 (S.D.N.Y. Dec. 29, 2011). Pro se copyright lawsuit against YouTube tossed because the copyrights weren't properly registered before suit. Obodai has appealed to the Second Circuit.

* Personal Keepsake Inc. v. Personalizationmall.com. an interesting ruling on 17 USC 1202 (copyright management information). Rebecca's blog post.

* Hollywood Reporter: More details on Warner's takedown systems and the 1M takedown notices it sent to Hotfile.

* Hollywood Reporter: Universal Music May Have Inadvertently Exposed a Flaw in the YouTube Takedown Process.

* Maximized Living v Google, the funky 17 USC 512(h) case, has been appealed. Prior blog post.

* Arena v Doe complaint: Harassed women claim Google isn't honoring DMCA takedown notices.

* Lawyers sue Lexis/Westlaw for copyright infringement for republishing their legal filings and briefs. See this WSJ May 2006 blog post on the topic.

* Scientific publications are gearing up for a copyright litigation frenzy against patent applicants who cite the articles in their patent applications and may be keeping copies of the articles in their files. The Patent Office's position that such copies are fair use.

* Slate on the (copyrightable?) judgments made when making a map.

* Sean Flaim, Copyright Conspiracy: How the New Copyright Alert System May Violate The Sherman Act. Prior blog post.

* Mick Haig case results in more sanctions and attorneys' fees.

* Stephen Fairey pleads guilty to criminal contempt for covering up that he relied on the AP photo when creating the Obama Hope poster.

* Fraserside IP L.L.C. v. Hammy Media, Ltd., 2012 WL 124378 (N.D. Iowa Jan. 17, 2012). No jurisdiction in Iowa over xHamster, a Cyprus-based porn website: "xHamster has no offices in Iowa, no employees in Iowa, no telephone number in Iowa, and no agent for service of process in Iowa. xHamster does not advertise in Iowa. No xHamster officer or director has ever visited Iowa. xHamster does not maintain any of its servers within Iowa. All of xHamster's servers are located outside of the United States."

* Perfect 10, Inc. v. Google, Inc., 2012 WL 685778 (Mem) (U.S. March 5, 2012). Supreme Court declined Perfect 10's cert petition seeking an injunction against Google. Prior blog post.

* C-360/10, Belgische Vereniging van Auteurs, Componisten en Uitgevers (SABAM) v Netlog NV:

The owner of an online social network cannot be obliged to install a general filtering system, covering all its users, in order to prevent the unlawful use of musical and audio-visual work...Such an injunction would result in a serious infringement of Netlog's freedom to conduct its business since it would require Netlog to install a complicated, costly, permanent computer system at its own expense.

Righthaven

* Righthaven.com sold at auction for $3,300.

* Characteristically hypocritical whining from Righthaven about unfair litigation tactics.

* Nevada State Bar has opened an inquiry into three Righthaven attorneys.

* Righthaven v. Kelleher (D. Nev. Jan. 13, 2012): "Buried in a footnote of Plaintiff’s response to the Court’s order to show cause is Plaintiff’s admission that sixteen (16) months after filing the Complaint (#1) in this action and after conducting little to no discovery, it has still not located the written assignment covering the work at issue in the Complaint."

* Righthaven v. Eiser (D.S.C. Jan. 13, 2012). Another court, this time in South Carolina and involving a MediaNews asset, rules that Righthaven lacked standing due to a failed copyright ownership assignment and awards attorneys' fees. In Righthaven, LLC v. Eiser, 2012 WL 527569 (D.S.C. Feb. 16, 2012), the judge approved the magistrate report.

* Righthaven v. Computer Services One (D. Nev. March 1, 2012). Yet another judge in Nevada says Righthaven lacks standing.

* Righthaven's purported copyrights are going to auction. I'm trying to decide which one to bid on!

Posted by Eric at 11:24 AM | Copyright | TrackBack

Facebook and Zynga Privacy Litigation Dismissed With Prejudice [Catch up Post]

[Post by Venkat Balasubramani]

In re Facebook Privacy Litigation, 10-02389 (N.D. Cal.; Nov. 22, 2011)

In re Zynga Privacy Litigation, 10-04680 (N.D. Cal.; Nov. 22, 2011)

These decisions are several months old, but they remain worth mentioning despite the fact they are well past their "blog-by" date. The court recently rejected plaintiffs’ motion to amend the judgment as to Facebook, so the cases are still active.

Facebook and Zynga scored an initial win last May against putative class action claims arising out of alleged data leakage from Facebook to its advertisers. The court expressed some skepticism about plaintiffs’ claims but gave plaintiffs a chance to amend their complaint. My blog post on the court’s earlier ruling: “Facebook Scores Initial Win Against Privacy Plaintiffs Over Data Leakage Claims -- In re Facebook Privacy Litigation.” This time around the court grants Facebook’s and Zynga’s motions to dismiss with prejudice. Plaintiffs appealed the ruling in the Zynga case to the Ninth Circuit. (See the link to the Justia page.) With respect to the Facebook dismissal, plaintiffs requested the correct to amend or alter the judgment, but the court refused this request.

Claims Against Facebook

Stored Communications Act

On the Stored Communications Act claim, the court says that the complaint contains inconsistent allegations regarding whether the communications in question were requests to connect to specific advertisements or whether Facebook acted as a “remote computing service” provider under the SCA:

On the one hand, Plaintiffs allege that the communications at issue in this case were requests to be connected to specific advertisements; that the requests were addressed to advertisers; and that Defendant merely acted as the "intermediary" for those communications.... On the other hand, Plaintiffs contend that Defendant acted as [a remote computing service ("RCS")] provider for purposes of Plaintiffs' claim under the SCA....

Analyzing claims under this statute leaves my head spinning, but the court ruling looks similar to its earlier conclusion (and reminds me of the court's analysis in the DoubleClick case). Suffice it to say that the court was not excited about plaintiffs' claims either the first or the second (or third) time around. Plaintiffs sought to further detail their claims in their request to amend the court's judgment, but the court says no to this. Whatever the merits of the plaintiffs' SCA claims, their pleadings were not apparently a model of clarity.

California Penal Code sec. 502

This statute creates a cause of action against someone who introduces a “computer contaminant” into the plaintiff’s computer or computer system. Plaintiffs' own allegations admitted that the “referrer header” (which plaintiffs allege Facebook improperly disclosed to advertisers) is a “standard web browser function provided by web browsers since . . . 1996.” The court says that this admission dooms plaintiffs' claims under section 502 since any allegedly improper transmission occurred as a result of the browser’s “normal operation” rather than any contaminant allegedly introduced by Facebook. (See also Amazon v. Del Vecchio.) Section 502 was the same section Facebook relied on when it sued Power.com, although Facebook relied on a different part of the statute. It did not come to pass in this case, among other reasons because Facebook relied on a different part of the statute, but this made me think of Eric’s frequent admonition about considering blowback from overzealous enforcement efforts.

Breach of Contract and Fraud

Plaintiffs sought to rely on the “personal information as property” theory to support their breach of contract claim. The court squarely rejects this argument. The court also rejects the fraud claim for lack of damages.

Claims Against Zynga

The court resolved the Stored Communications Act against Zynga on the same basis as against Facebook. Plaintiffs’ breach of contract claim against Zynga also suffered the same fate as the breach of contract claim against Facebook. With respect to Zynga, plaintiffs alleged that they were paying customers, but the court finds that any payments by plaintiffs were in exchange for virtual currency, and plaintiffs failed to allege that they did not receive the virtual currency which they paid for. Thus, the fact that plaintiffs were paying customers does not change the analysis. Plaintiffs also brought a breach of good faith claim against Zynga, but the court finds that these were merely re-packaged breach of contract claims and suffered from the same deficiencies.
__

It’s worth distinguishing data leakage claims from claims where Facebook is allegedly using likenesses or photographs of end users to promote itself or products or services. (See Eric’s discussion of Fraley v. Facebook: Facebook "Sponsored Stories" Publicity Rights Lawsuit Survives Motion to Dismiss--Fraley v. Facebook.) These claims have a much greater chance of proceeding, even if they do not succeed on the merits.

Unlike publicity rights claims, data leakage claims have routinely been kicked out of court, whether on the basis of standing or on the merits. Even appeal courts have been unfriendly towards these claims. I thought that the latest wave of privacy lawsuits could end up being salvaged or revived by a friendly appeals court decision, but I’m starting to think the chances of this are slim.

You have to give Facebook credit for staving off the numerous privacy lawsuits. Other than the Beacon lawsuit (the settlement approval of which is still on appeal to the 9th Circuit) and the publicity rights lawsuit which Eric blogged about in December, there have not been any other privacy plaintiff wins against Facebook. Maybe people should consider taking Facebook to small claims court? On the other hand, if they have been unable to get traction in different courts with different versions of their claims, this is a strong indicator that there's no "there" there. It seems like Facebook is fast and loose with its privacy practices, but it's another matter entirely as to whether Facebook's practices create liability under existing statutes. Of course, Facebook will still have to deal with the watchful eye of the FTC, but enforcement efforts by private plaintiffs look like a dead end.

Posted by Venkat at 09:05 AM | Licensing/Contracts , Privacy/Security , Trespass to Chattels

March 06, 2012

StubHub Gets Section 230 Immunity from Anti-Scalping Laws Because Users Set Prices--Hill v. StubHub

By Eric Goldman

Hill v. StubHub, Inc., 2012 WL 696223 (N.C. App. Ct. March 6, 2012). My blog post on the trial court ruling against StubHub in this case. Earlier blog post on the motion to dismiss ruling.

This long-running case (4.5 years so far) is just one of many arising out of the Hannah Montana concert tour of 2007, which unexpectedly turned into a watershed Cyberlaw moment. The tour has spawned substantial legislative and litigation activity, including the notorious RMG v. Ticketmaster case, and several of the cases have reached bad legal results as populist judges have felt sorry for the tweeners and their parents gouged by high ticket prices due to the extraordinary demand.

One of the bad Hannah Montana rulings came in this case. Last year, the trial judge denied StubHub's Section 230 immunity in an rogue opinion. The appellate court correctly reverses that ruling and holds that "Defendant is entitled to immunity from any liability arising from the ticket price established by Mr. Holohan" and orders the trial court to grant summary judgment to StubHub. The result is a great Section 230 win, and the supporting opinion is mostly good too.

The court sets the context for its opinion:

According to our research, there have been approximately 300 reported decisions addressing immunity claims advanced under 47 U.S.C. § 230 in the lower federal and state courts. All but a handful of these decisions find that the website is entitled to immunity from liability.

Unfortunately, the judge didn't appear to see David Ardia's article, which would have sped up the research and empirically challenged their last sentence. Nevertheless, the court's assessment rightly treats plaintiff wins as exceptional and perhaps aberrational, so there better be a good reason why the immunity doesn't apply. Reinforcing this point, the court says later "The reported decisions construing the immunity provisions of 47 U.S.C. § 230 have rejected a number of efforts to expand the range of factual situations in which a website is deprived of the immunity from liability provided by that statutory provision."

This case turned on who the court thought was the ticket "seller." The trial court treated StubHub as the real seller due to the various tools StubHub provides to facilitate matching, in which case users are effectively StubHub's suppliers just like the pretext report generators in the Accusearch case.

The appellate court saw it differently. The opinion treats StubHub as a venue for buyer-seller matching and the users as the real sellers. This styling of StubHub as a venue, not the seller, also disposes of the plaintiffs' related claim that StubHub overcharged the maximum service fee that a "seller" or its agent can charge (a law that North Carolina has since amended to exclude StubHub). Once the court conceptualized StubHub as a venue, the Section 230 immunity follows naturally. No one questions that the StubHub sellers set the final price for the tickets they have, which makes the price, as a data item, third party "content" to StubHub.

After canvassing a number of the plaintiff Section 230 wins, the court synthesizes a new legal standard for what constitutes content development:

to “materially contribute” to the creation of unlawful material, a website must effectively control the content posted by those third parties or take other actions which essentially ensure the creation of unlawful material

The latter standard, "essentially ensure the creation of unlawful material," is a trivial variation of the Roommates.com standard that foreclosed the Section 230 immunity if you "design your website to require users to input illegal content."

However, the former standard, "effectively control the content" of third parties, is a non-sequitur. The apparent support for that standard is the court's discussion of Jones v. thedirty, which the court said predicated liability "upon the website’s decision to affirmatively adopt or ensure the presentation of unlawful material." The court should have said that the Jones case was a mistake; but even if the court doesn't believe Jones is wrong, saying liability can attach when a website "effectively controls" third party content isn't supported by Jones or by the law generally. Websites get Section 230 immunity because they exercise editorial control over third party content, so what "control" is the court contemplating that isn't subsumed in the permissible editorial control? Further, the court's additional standard was unnecessary because the court never applies this looser standard to the facts at issue. In an opinion clearly designed to take the wind out of the plaintiffs' sails, the opinion's sloppy articulation of the legal standard is an stiff ocean breeze. Sigh.

In refuting the trial court's analysis, the court provides a more useful recap:

the prevailing tendency among decisions construing the relevant statutory language is to hold that the immunity provided by 47 U.S.C. § 230 is (1) not defeated by evidence tending to show that the website had notice of the unlawful posting; (2) not affected by the fact that a website attempts to earn a profit; and (3) not subject to any liability on the basis of “reasonable foreseeability” or “willful blindness” analysis. Thus, the fact that Defendant may have been on notice that its website could be used to make unlawful sales and that certain of Defendant’s practices may have provided incentives for the overpricing of certain tickets does not support a decision stripping Defendant of its immunity under 47 U.S.C. § 230.

All true. In particular, I can't recall another opinion expressly discussing a "willful blindness" challenge to Section 230 immunity.

The court also criticizes the trial court's review of the entire website in determining Section 230's applicability, even considering features that were not used by the litigants. The court says it's inappropriate to do this kind of holistic review of features that weren't implicated by the case's facts:

the appellate cases addressing immunity claims arising under 47 U.S.C. § 230 have analyzed the specific content alleged to be unlawful rather than examining the entire website on a more generic basis

Finally, the court goes out of its way to knock the NPS v. StubHub denial of Section 230 immunity:

Aside from the fact that the evidentiary and procedural context present in NPS is substantially different from that before the Court in this case, we simply do not find the reasoning employed by NPS persuasive, believe that it is inconsistent with the decisions concluding that knowledge of unlawful content does not strip a website of the immunity from liability granted under 47 U.S.C. § 230, and decline to follow it in deciding the present case.

Because of its limitations, I'd love to see the NPS precedent relegated to the dustbin. Since that ruling, we've had several good Section 230 rulings in ticket cases, including this one and the Milgram v. Orbitz case. As the favorable precedent continue to mount, I hope lawsuits against ticket resale venues will wane.

Posted by Eric at 11:33 AM | Derivative Liability , E-Commerce | TrackBack

March 05, 2012

Wikipedia Edits Support Defamation Claim--Pitale v. Holestine

By Eric Goldman

Pitale v. Holestine, 2012 WL 638755 (N.D. Ill. Feb. 27, 2012)

Given the size and scale of its database, it's remarkable that we don't see more US defamation lawsuits filed (rather than just threatened) over Wikipedia entries. It's even more remarkable when you consider Wikipedia's unique editorial practices, such as allowing anyone to edit and not having a paid editorial staff, both of which defy the normal offline editorial conventions forged from the courtroom crucible over the centuries. We've seen a few defamation lawsuits over Wikipedia entries, such as celebrity lawsuits (Fuzzy Zoeller, Ron Livingston) and sue-the-world lawsuits (e.g., this one), but most of those don't appear to have gone very far. Indeed, I believe this opinion is the first one in Westlaw's database to discuss the substance of a defamation claim for Wikipedia edits. (The only other similar one I found was Park West Galleries, Inc. v. Hochman, 2009 WL 5151315 (E.D. Mich. December 17, 2009), which allowed the plaintiff to get discovery about who edited the entries in question). Yet, despite its comparative novelty, this opinion reads like a normal defamation opinion. As I'll explain in a moment, perhaps it shouldn't.

Pitale runs some for-profit colleges. For 2 years, Holestine worked with Pitale and reported to him. After Holestine left, he allegedly made false statements about Pitale and the colleges in the "American Career College" and "Eldorado College" Wikipedia entries (made presumably from this account) as well as at a a blog. The court does a very careful job scrutinizing each claim and dismisses several on a motion to dismiss. However, the defamation/false light claims over several statements survive the motion.

Unlike most defamation lawsuits, there is a lot of metadata about this activity that can help us understand the dispute. The court obliquely says that the statements in question have been removed from the entries, but it doesn't say who removed them or how quickly. Ultimately, the court ought to consider Wikipedia's self-correction mechanisms in evaluating the claim's merits. I didn't run through the various versions, but it looks like the allegedly defamatory statements were corrected on the American Career College (by a user "Melissawest") within a month; and on the Eldorado College page, the corrections were also within a month (by a user "Thecorrector2010") and, after a second attempt to restore the material, within 2 days.

I think the judge should acknowledge the relatively short amount of time any allegedly defamatory material was actually displayed in the Wikipedia entries, as well as the low traffic to the pages. According to stats.grok.se, each of the two pages in question had a total of less than 1,000 pageviews in all of June and July 2010--some of which were pageviews to people immune to the defamation, such as Holestine, Pitale or other college officials, and the Wikipedia editors fixing the pages/correcting any defamation. (The relevant time period is mid-June to mid-July; I didn't take the time to count page views during the specific window, but it's even less). Clearly, these are relatively obscure pages, meaning that any reputational impact of the alleged defamation was surely small.

For that reason, this case probably doesn't belong in court at all. Yet, like so many defamation lawsuits, economic rationality probably isn't a main motivator for these combatants.

The court does give a nod to Wikipedia's ethos in concluding that one statement was intended as a fact, not an opinion:

The overall context also suggests that the statement was intended as a statement of fact: Wikipedia is an open-source encyclopedia, primarily serving (or at least intending to serve) as a source of factual information rather than as a forum for expressing opinion. Wikipedia strives to be a repository of facts, not opinions. [with a footnote saying:] One of Wikipedia's "three core content policies" is "neutral point of view." http://en.wikipedia.org/wiki/Wikipedia:Neutral_point_of_ view (Last accessed Feb. 27, 2012)

Yet, the judge doesn't put 2+2 together to realize that the fairly quick reversions might reflect the other editors' judgments that the edits failed to comply with these norms. Some of the comments in the edit history suggest that's indeed the case.

Posted by Eric at 10:00 AM | Content Regulation | TrackBack

March 02, 2012

Tea Partiers Wage War Against Each Other Over a Google Groups Account--Kremer v. Tea Party Patriots

By Eric Goldman

Kremer v. Tea Party Patriots, Inc., 2012 WL 639134 (Ga. App. Ct. Feb. 29, 2012). The docket.

I'm going to exercise extraordinary restraint and not crack any jokes about the Tea Party movement or its adherents.

Kremer created the Tea Party Patriots (TPP) Google Group in early 2009. Later in 2009, Kremer had a falling out with TPP. See Kremer's side of the story. (FWIW, it looks like the internal acrimony has continued after she left). Litigation over Kremer's departure ensued, including a scramble for the trademark and "the Websites identified in the Complaint (i .e., www.teapartypatriots.org, (both the website and the domain name); the Tea Party Patriots Ning social networking site; accounts with Google Groups, Blogtalkradio, YouTube, and Ustream; and other associated websites and Internet accounts that carry on TPP's activities)." The parties temporarily resolved their dispute with a consent order in 2009 that restricted Kremer's ability to control the various web accounts. TPP alleged that Kremer violated the consent order and brought a contempt proceeding in 2011. The trial court found Kremer in contempt. In this ruling, the appellate court affirms.

One of the main points of contention relates to the TPP Google Group (this one?). Kremer created the group, so Google recognized her as the group's "owner" and gave her super-user administrative powers. Mysteriously, after the consent order, Dooley (a TPP director) was blocked from logging into the group, and the group was renamed to "Patriotville" (which "resulted in confusion and resulted in TPP receiving criticism on its own site"). TPP claimed Kremer did it.

The court was persuaded:

The message Dooley received in January 2011 indicated that "the owner" had blocked her access to the site, and it is undisputed that Google considers Kremer to be the owner. Moreover, Kremer admitted that she had blocked another individual from the site. This evidence supports the trial court's finding that Kremer had intentionally violated the Consent Order.

The first point seems like a non-sequitur. Is it possible that Google characterizes more than one person as the account "owner"? At minimum, the court appears to overweight the wording of a form email that probably wasn't written by a lawyer. Then again, good lawyering could have easily made this a contestable point--if there was something to contest.

Kremer was also ordered to turn over the Google Group for the Georgia chapter of TPP based on the order's reference to "associated websites and Internet accounts that carry on TPP activities." Kremer further violated the consent order by not dissociating herself from TPP more clearly in her biographies.

Two brief observations about this situation:

1) This is another reminder that it's crucial for newly formed organizations to definitively address the ownership of trademarks and other virtual assets from day 1, when everyone still loves each other. We've blogged on this issue many times; my paradigmatic example is Mikhlyn v. Bove. When the ownership issue comes up later, it's usually because the principals are locked in a death-match and are beyond the point of reaching sensible compromises.

2) In further support of that principle, a lawsuit over a Google Group that requires a week-long trial, followed by an appeal to a state appellate court, with at least three spin-off lawsuits related to statements/conduct in the initial lawsuit, cannot be cost-benefit justified. Then again, for folks who aren't impressed with the Tea Party movement, there may be some salutary side-effects to having Tea Partiers spend their energy and money fighting each other.

Posted by Eric at 09:35 AM | Domain Names , General , Trademark | TrackBack

March 01, 2012

Facebook, Google and Lexis-Nexis Get 47 USC 230 Immunity in a Bizarre Case Involving a Missing Sex Toy--Gaston v. Facebook

By Eric Goldman

Magistrate ruling: Gaston v. Facebook, Inc., 2012 WL 629868 (D. Or. February 2, 2012)
Judge's approval of the magistrate's ruling: Gaston v. Facebook, Inc., 2012 WL 610005 (D. Or. February 24, 2012)

Kanal V. Gaston went on a bit of a litigation tear recently, filing no less than four highly similar lawsuits (Gaston v. Harris County complaint in Oregon, Gaston v. Harris County complaint in California, Gaston v. Microsoft complaint, Gaston v. Facebook complaint). All of these lawsuits relate to issues he had with Rivas, the mother of his child, and some recriminations over a missing sex toy. If it's important to you to try to understand how that all fits together, read the court's description of his allegations.

With respect to the technology defendants, the court recites the following allegations:

* Facebook "has allowed and/or gave [Rivas] access to its server or internet web communication system or device or social network to spread false or defamatory statements against [him]."

* Lexis-Nexis provides "computer assisted legal research to the public at large and holds the largest electronic database for legal and public records in the world" and has "conspired with other Defendants to retaliate against [Gaston] and has published or republished false and defamatory statements against him."

* Google "reaches more than one billion online users (people) worldwide" and has "conspired with other Defendants to retaliate against [Gaston], and has published or republished false and defamatory statements against him."

The court easily disposes of the claims against these three defendants on 47 USC 230 grounds:

Gaston seeks to hold Google, Facebook, and Lexis Nexis liable for defaming him and/or conspiring to defame him based solely on content created or supplied by Rivas....The CDA defines "interactive computer service" as "any information service, system, or access software provider that provides or enables computer access by multiple users to a computer server, including specifically a service or system that provides access to the Internet and such systems operated or services offered by libraries or educational institutions." 47 USC s 230(f)(2). Google, Facebook and Lexis Nexis clearly fall within that definition. Therefore, Gaston fails to state any viable claim for defamation against those three defendants who should be dismissed with prejudice.

Gaston didn't contest the magistrate report, so the judge adopted the magistrate's opinion verbatim.

The most noteworthy feature about this ruling is that Lexis-Nexis qualified for 230 coverage, which I believe is the first time they've done so. Even though it may be a first, this isn't a surprising result; indeed, to the extent they manage their own electronic network, they may be a better fit for the definition of a provider of an interactive computer service than a typical website.

Posted by Eric at 11:04 AM | Content Regulation , Derivative Liability | TrackBack

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March 31, 2012

Lawsuit Against Google for Putting Search Queries in Referral URLs Moves Forward – Gaos v. Google

March 30, 2012

What Do Soymilk and Nutella Have to Do With an Online Harassment Case?--Taylor v. Texas

March 29, 2012

Facebook Posts Complaining About Supervisor Conduct do Not Support Retaliation Claim – DeBord v. Mercy Health System

Lawsuit Against Avvo for Lawyer's Profile Dismissed as SLAPP--Davis v. Avvo

March 27, 2012

Emailing the URL of an Allegedly Defamatory Post Immunized by 47 USC 230--Shrader v. Biddinger

March 25, 2012

Seventh Circuit: No Private Cause of Action Under the Video Privacy Protection Act for Failure to Purge Information--Sterk v. Redbox

March 23, 2012

Qwest Gets Mixed Rulings on Contract Arbitration Issue—Grosvenor v. Qwest & Vernon v. Qwest

March 22, 2012

No Breach of Contract Claim from Mid-Stream Change of WSJ Online Pricing – Lebowitz v. Dow Jones

March 21, 2012

Trademark Lawsuit Over Website Text Comparing Products Baffles the Judge--AR Pillow v. Cottrell

March 20, 2012

Jan.-Feb. 2012 Quick Links, Part 6 (Privacy and more)

Another 512(f) Claim Fails--Ouellette v. Viacom

Suspension for Facebook/YouTube Rap Video Critical of High School Coach Does not Violate First Amendment – Bell v. Itawamba County School Board

March 19, 2012

Irrational Copyright Lawsuit Over "Pi Symphony" Gets Sliced--Erickson v. Blake

March 17, 2012

Text Spam Class Action Against Jiffy Lube Moves Forward – In re Jiffy Lube Int’l, Inc., Text Spam Litigation

March 16, 2012

Facebook's "Browsewrap" Enforced Against Kids--EKD v. Facebook

March 15, 2012

Facebook Faces Jurisdictional Hurdle in its Trademark Lawsuit Against Faceporn--Facebook v. Pedersen

March 13, 2012

TheDirty Gets Its First 47 USC 230 Win--S.C. v. Dirty World

March 12, 2012

Jan.-Feb. 2012 Quick Links, Part 5 (Advertising, Consumer Reviews & Search Engines)

Another Newspaper Isn't Liable for User Website Comments Per 47 USC 230--Spreadbury v. Bitterroot Library

March 11, 2012

Jan.-Feb. 2012 Quick Links, Part 4 (Evidence Edition)

Jan.-Feb. 2012 Quick Links, Part 3 (Defamation/Content Regulation Edition)

March 10, 2012

Justin.tv Mostly Eliminates Zuffa's Trademark and Communications Act Claims Over User-to-User Live Video Streaming

March 09, 2012

Group Text Services Grapple with TCPA Class Actions

Fake Political Attack Video Doesn't Violate Lanham Act--Ron Paul v. Does

March 08, 2012

Jan.-Feb. 2012 Quick Links, Part 2 (Trademarks, Patents, Trade Secrets, Innovation Edition)

March 07, 2012

Jan.-Feb. 2012 Quick Links, Part 1 (Copyright Edition)

Facebook and Zynga Privacy Litigation Dismissed With Prejudice [Catch up Post]

March 06, 2012

StubHub Gets Section 230 Immunity from Anti-Scalping Laws Because Users Set Prices--Hill v. StubHub

March 05, 2012

Wikipedia Edits Support Defamation Claim--Pitale v. Holestine

March 02, 2012

Tea Partiers Wage War Against Each Other Over a Google Groups Account--Kremer v. Tea Party Patriots

March 01, 2012

Facebook, Google and Lexis-Nexis Get 47 USC 230 Immunity in a Bizarre Case Involving a Missing Sex Toy--Gaston v. Facebook