Archive for September, 2012

Blogger Johnny Northside Victorious on Appeal – $60K Award Struck Down

Thursday, September 27th, 2012

An appeals court in Minnesota has struck down a $60,ooo defamation award against blogger  John Hoff (“Johnny Northside” on his blog). In doing so, the appeals court did what appeals courts are supposed to do – correct erroneous actions of trial courts.

Citizen Media Law Project’s blog has the full story and an analysis of the legal aspects: Justice Delayed But Not Denied – Appellate Court Overturns $60K Verdict Against Blogger for Posting “Not False” Information

Prior coverage on Blog Law Blog:

Ugly Blogging from Coyote Ugly CEO Not Actionable

Wednesday, September 26th, 2012

Coyote Ugly Nashville logoSometimes, it takes a federal judge to explain something that ought to be common sense.

Misty Blu Stewart learned this the hard way, in her ongoing class action lawsuit under the Fair Labor Standards Act against her former employer, Coyote Ugly Saloon.

Stewart claimed that an expletive-laced blog post by Coyote Ugly CEO Liliana Lovell was retaliation against Stewart.

The only problem? Stewart no longer worked for Coyote Ugly at the time of the post.

According to the court: “Under the FLSA, an ‘employee’ is defined as . . . any individual employed by an employer.’” As such, her retaliation claim had to be denied.

Here’s a quick chronology, as set forth in the relevant court opinion, Stewart v. CUS Nashville, LLC, No. 311-cv-0342, 2012 WL 4049968 (M.D. Tenn. Sept. 13, 2012):

  • Sometime before April 7, 2011, Stewart and Coyote Ugly Saloon in Nashville part ways (the post in question, and the court opinion itself, refer to Stewart as having been “terminated”).
  • On April 7, 2011, Stewart files suit, alleging FLSA claims “arising out of Coyote Ugly’s alleged operation of an illegal tip pool and its failure to compensate its employees for work performed off-the-clock and during overtime hours.”
  • On or about May 11, 2011, Lovell creates the offending post on the Coyote Ugly website, saying in reference to Stewart and her lawsuit, “my thoughts are f* *k that b* *ch.”
  • On Feb. 13, the court certifies a class action, with two classes whose parameters track the claims Stewart made in her initial complaint
  • On July 31, Stewart files a motion to amend her complaint to, among other things, add a retaliation claim, based on Lovell’s post.

So, in simple terms, Stewart was essentially telling the court: “Judge! The Defendants just called me a name!”

The hoped-for response from the judge would have been something along the lines of “Defendants, stop calling Plaintiff that name! Just for that, you’re getting a timeout . . . to the tune of several thousand dollars!”

Instead, the only thing the judge could do, having been told of Defendants’ name-calling, is simply to say, “OK. So what? Sticks and stones, Plaintiff, sticks and stones.”

So, just to wrap things up:

  • Stewart is still not a Coyote Ugly employee.
  • Coyote Ugly is still facing the class action suit Stewart brought.
  • Employer retaliation still cannot be effected against people who are not employees.

EEJ’s thoughts:

Even if blogging “f* *k that b* *ch” doesn’t create retaliation liability, it’s still bad news for the defendants. You can bet Stewart’s attorney is working on a plan to make the blog entry admissible evidence for one of the remaining claims. Even if this kind of wash-your-mouth-out blogging doesn’t get you a time-out from the judge, it sure won’t win you friends in the jury box.

Introducing Contributing Blogger John S. Merculief II

Tuesday, September 25th, 2012

John C Merculief II self-portrait in automobile windowI’m tremendously excited to introduce Blog Law Blog’s first contributor, John S. Merculief II.

John is a second-year student at the Texas Tech University School of Law, where I am currently a visiting professor. He put up his first post last week.

A veteran journalist, John worked in newspapers for over a decade, including a tour of Texas dailies in San Angelo, Abilene, and the Houston area. He got into reporting after getting a bachelor’s in liberal arts from the University of Texas at Austin and a master’s degree in newspaper journalism from the renowned program at Syracuse University.

As a journalist-turned-budding-lawyer, it’s no surprise that John has a particular interest in media law. That will be extremely helpful for Blog Law Blog blogging. And as a bonus, he also happens to have an interest in municipal law. Regular readers know that that will definitely be a plus as we see more and more and moooooooooooore blog law scuffles involving local government officials.

Tomorrow, John returns with a post about what happens when you mix blogging, bad-mouthing, and bar-tending!

Australia’s Attempts to Curtail Twitter Bullies Ineffectual

Wednesday, September 19th, 2012

The Canberra Times is reporting that the leader of New South Wales is asking the Australian federal government for tighter controls on what are called Twitter “trolls.”

The request is in response to an incident in which a star rugby player received an anonymous vulgar Tweet regarding his mother, who died of pancreatic cancer.

To put this in context, online abuses that get almost universal disapproval here in the United States – but that are protected speech under the U.S. Constitution – are actually out of bounds under Australian law, according to the newspaper:

A Twitter user or troll found to ”menace, harass or cause offence” using the social networking medium could be jailed for up to three years.

A person can be prosecuted under this section if they use a ”carriage service” – essentially, any communication device – to pressure another person, in a way that would be regarded by ”reasonable persons” as being ”menacing, harassing, or offensive”.

There are also laws at state level that can be used to stamp out offensive online behaviour.

But there’s one major caveat. Because these “trolls” set up bogus accounts to do their dirty deeds and then deactivate them quickly, it seems that no one has actually been prosecuted for their Twitter behavior.

CSLSA 2012 Scholarship Conference Submissions Deadline Extended

Monday, September 17th, 2012

Central States Law Schools Association - CSLSA - logoThe Central States Law Schools Association has announced an extended deadline to submit abstracts for the 2012 Scholarship Conference. Legal scholars now have until Friday, September 22, 2012 to submit an abstract of 500 words or less to Professor Melissa T. Lonegrass at Missy.Lonegrass@law.lsu.edu. The conference invites presentations on works in progress as well as finished articles.

This years conference will take place October 19-20 at the Cleveland-Marshall College of Law, in Cleveland, Ohio. This has been a great conference in the past, and I’m sure it will be again this year. (I will be there.)

Twitter Deserves Continuing Credit for Defending Privacy in Harris v. N.Y.

Saturday, September 15th, 2012

gavel coming down on twitter birdFrom what I see, Twitter is doing a strong job of standing up for user privacy in the case of the criminal prosecution of Malcolm Harris. In that case (CMLP summary) New York prosecutors are trying to get Twitter to hand over information about Harris, who has been charged with disorderly conduct relating to an October 2011 Occupy Wall Street protest on the Brooklyn Bridge.

Yesterday, Twitter handed over the requested information pursuant to a court order.

There has been a lot of traffic suggesting that Twitter gave up rather than continue to fight (e.g., Betabeat: “Twitter Caves”). But that’s unfair. Twitter is trying to get review from a higher court. And the records they turned over are sealed until September 21, when another hearing is set.

Twitter has done the right thing. It is right for Twitter to resist. But it is also right for Twitter to comply with the court order to turn over the information. (Even though the court was plainly wrong to issue the order.)

What Twitter should do – and what it is doing in this case – is use all available legal process to protect user privacy. Twitter should not, however, violate the law in order to thwart the courts and prosecutors.

Many reporting on the case have said something to the effect that Twitter decided to turn over the information rather than face expensive fine for being held in contempt of court. (EFF said something similar in an otherwise great post on the case.) Saying that makes it sound like Twitter cheaped out. But, as I see, and as I would see it if I were advising Twitter, the problem is not the expense, it’s that refusing to comply with the court order means Twitter itself is violating the law.

It’s true that reporters will often take a contempt citation and go to jail to protect an anonymous source. When they do, it’s civil disobedience, and it’s often heroic. I hate to say it, but the stake are simply lower here. Anonymous-source-based journalism outed Watergate. It’s cultural and societal importance looms very large. Journalists have tried to get shield laws passed to prevent contempt being used to compel the identification of anonymous sources. And shield laws have been passed in many states. For the remaining gaps, brave reporters have often acted in defiance of the courts and the law to uphold free-press values.

The battle Twitter is fighting is different. It’s more of a general internet privacy issue, and while important, it’s a different ball of wax. It’s worth fighting for the cause in the courts, in the legislatures, and on the international level. But I’m not convinced there are fundamental rights here which necessitate disobeying court process.

Arbitrations and the Corporate Litigants Who Love Them

Tuesday, September 11th, 2012

Tim Cushing at Techdirt picked up on the post I did on the Barnes & Noble case (where I, in turn, was picking up on the post Venkat Balasubramani did on Eric Goldman’s Technology & Marketing Law Blog).

In my post, I tried to explain why arbitration is such a great deal for corporations. For various reasons I didn’t dwell on the question of whether corporations get better-than-fair treatment in the arbitration itself. But they do. Much better.

Cushing picked up where I left off by citing to a Seattle Post Intelligencer article reporting the results of a Public Citizen study finding that corporations beat consumers about 95 percent of the time in arbitration.

The Public Citizen study the PI was talking about appears to be this one: The Arbitration Trap: How Credit Card Companies Ensnare Consumers [pdf].

The details are interesting. The key statistic in the study is actually 94 percent – that’s the winning rate for corporations in the cases handled in California by the private arbitration service provider called the National Arbitration Forum. (California formed the sample pool because California, unlike other states, requires public reporting of some limited data by arbitrators.)

The 95 percent figure is for just a small group of specific 28 arbitrators. But it’s that elite group that gets almost all the work!

The Busiest Arbitrators Produce the Results Corporations Seek: In California, a small, busy cadre of 28 arbitrators handled nearly 9 out of every 10 NAF cases. This group ruled for businesses 95 percent of the time. Another 120 arbitrators handled slightly more than 10 percent of the cases in which an arbitrator was assigned. They ruled for businesses 86 percent of the time and for consumers 10 percent.

Can you imagine what it would be like if, instead of judges getting their salary from the government, they were paid by litigants. And can you imagine if there were different court systems competing with one another, all vying for the repeat business of litigants who constantly find themselves being sued? Well, you don’t have to imagine it: That’s arbitration.

As a corporate user of arbitration, you pick the arbitration firm upfront by selecting it in the terms of service or credit-card holder agreement. Of course, you are going to pick the firm that gives you good results. And since arbitration firms are competing for the loyalty of corporate customers, they are going to pick the arbitrators that give those corporate customers what they want. That’s not something dirty for the corporation to do, mind you. That’s just a general counsel doing her or his job. But it sure creates incentives that are skewed.

The report explains:

Arbitrators have a strong financial incentive to rule in favor of the companies that file cases against consumers because they can make hundreds of thousands of dollars a year conducting arbitrations. The arbitrators are chosen by the arbitration firms hired by MBNA and other corporations, which are unlikely to pick arbitration firms that produce results they do not like. Arbitrators routinely charge $400 or more an hour. Top arbitrators can charge up to $10,000 per day and some make $1 million a year. In comparison, California Superior Court judges earn $171,648.

(Yeah, judges don’t make as much. But, in fact, the judgeship is a great stepping stone to being an arbitrator.)

The Public Citizen report explains how systemic bias can develop:

A Race to the Bottom for Arbitration Firms: Companies track how arbitrators rule, and do not choose arbitrators who do not rule in their favor. One NAF arbitrator, a Harvard law professor, was blackballed after she awarded $48,000 to a consumer in a case in which a credit card company filed a claim against the consumer. After the same credit card company had her removed from other pending cases, she resigned, citing NAF’s “apparent systematic bias in favor of the financial services industry.”

Hey, do you get the feeling that Harvard law professor they might have been talking about was Elizabeth Warren? Yeah, me too! Warren was thanked in the acknowledgments section, but it’s just as likely she was their source for information about a different Harvard law professor. (Harvard does have a huge faculty.)

Barnes & Noble Loses in Court for Lack of Notice on Terms of Service

Wednesday, September 5th, 2012

Barnes & Noble logoVenkat Balasubramani over at Eric Goldman’s Technology & Marketing Law Blog talks about a defeat for online retailer Barnes & Noble in their attempt to enforce a terms-of-service arbitration clause.

The case is interesting to any bloggers wondering what they can and can’t get away with by linking to a page of “Terms of Service.”

The plaintiff in Nguyen v. Barnes & Noble 12-cv-0812-JST (RNBx) (C.D. Cal.; Aug. 28, 2012) sued because after he purchased two HP TouchPad tablet computers at a price he was happy with, Barnes & Noble e-mailed him saying they had cancelled the order.

Before getting to the merits – whether Nguyen be able to get his tablets at the price at which he allegedly purchased them (and of course he should!) – B&N moved to enforce an arbitration clause in the B&N terms of service.

An arbitration clause allows a party – generally a huge corporation – to prevent a plaintiff – usually a consumer – from being able to litigate in court and get a trial by jury. Instead, the case goes to arbitration, where one or more arbitrators decide the case wholly outside the court system.

Corporations love arbitration in consumer disputes because arbitration alleviates the possibility of huge jury verdicts. It also can force plaintiffs to withdraw from the fight, because in the typical arbitration, both sides must pay the arbitrators fees, which can be too steep for a consumer to bear (in the thousands of dollars), especially when the potential recovery from an arbitration is likely to be low (maybe just in the hundreds or even less in a typical consumer dispute). Corporations also love arbitration because it prevents class-action litigation, which makes it economical to sue companies for having ripped off large numbers of people where any given individual’s loss was small. (It will come as no surprise that Nguyen’s suit was brought in a such a way that it could have blossomed into a large class action if the facts warranted.)

So B&N lost its bid to put Nguyen’s case into arbitration. Why? B&N couldn’t show that Nguyen had notice of the terms.

B&N buried the arbitration clause in terms of service that were linked to at the bottom of the bn.com pages. B&N could have had a pop-up “I agree” window or even just a box that Nguyen had to check saying he agreed to and had read the terms of service. They also could have written on the checkout screen about the transaction was subject to terms of service. But they didn’t do any of that. So, as a result, it looks like Nguyen will get his day in court.

Sounds like a win for consumers, huh? Balasubramani says not so fast:

It’s temping to see this case as a pushback on terms of service that contain arbitration clauses. However, it’s more likely an outlier in the sense that B&N’s terms of service implementation was so shoddy that it’s not likely representative of the typical terms of service case. If B&N had provided ample notice, the court would have probably enforced the terms and, as in the Slide and Zynga cases, required the consumer to arbitrate his claims.

Balasubramani sarcastically calls Nguyen’s claim “a tragic and sad story,” but says, “It’s tough to have much sympathy for B&N here … there’s zero excuse for not requiring the consumer to check the box and indicate assent to the terms as a condition of completing the transaction.”

Well, I think it’s hard to feel much sympathy for Barnes & Noble for the simple reason that they ripped Nguyen off. I say, give the man his tablets at the price he bought them! Barnes & Noble even sent an e-mail confirming the order … before they cancelled it. B&N has seller’s regret. Too bad. A deal’s a deal, I say. Cough up the tablets.

Unfortunately, you can bet Barnes & Noble will get their terms-of-service assent right next time.

Big online retailers like Barnes & Noble, eBay, and Amazon have consumer reviews and ratings to help consumers avoid getting ripped off when buying unfamiliar products or purchasing from a third-party seller. That’s great – ratings and reviews have been a positive innovation for consumers.

But clickwrap arbitration clauses have been a bad technological development for consumers. The portal entities – such as Barnes & Noble, eBay, and Amazon – have privileged positions in a not-so-competitive marketplace. There are few players, making choice limited. Consumers ought to be able to take these online companies to court when warranted. Unfortunately, the twin innovations of clickwrap agreements and arbitration clauses all too often make big corporate online players answerable to no one.