Attorney Evan Brown

December 3, 2024 First Amendment

The State of Washington throws the book at Meta for violation of political campaign disclosure law

In April 2020, the State of Washington sued Meta, alleging violations of Washington’s Fair Campaign Practices Act (FCPA). The case centered on Meta’s failure to comply with state disclosure laws, which require companies hosting political advertisements to maintain and disclose specific records of those ads. The state argued that Meta’s actions obstructed transparency in campaign finance, a cornerstone of Washington’s electoral integrity.

What the state asked for

The state sought several remedies to address Meta’s alleged violations. This included civil penalties for each instance where Meta failed to comply with disclosure requirements, an injunction mandating Meta to adhere to the law, and reimbursement of the state’s attorney’s fees and litigation costs. The lawsuit aimed to hold Meta accountable for hindering public access to critical information about political advertising on its platform.

The court’s decision

The lower court ruled in favor of the state, finding that Meta had committed 822 violations of Washington’s disclosure law. The court imposed $24.66 million in civil penalties and $10.52 million in attorney’s fees and costs, totaling $35.18 million. Notably, the court awarded treble damages for certain claims, finding certain of Meta’s violations to be intentional. The court also issued an injunction requiring Meta to satisfy the judgment within 30 days.

Meta appealed the decision, arguing that the disclosure law violated the First Amendment, was preempted by federal law (specifically Communications Decency Act at 47 USC 230), and that the lower court had miscalculated damages. However, the appellate court upheld the lower court’s decision in full, rejecting each of Meta’s arguments.

Why this case matters:

Reinforces Campaign Transparency: The case underscores the importance of public access to information about political advertising, a critical element of electoral transparency.
Holds Big Tech Accountable: The decision demonstrates that even global technology companies must comply with state laws, reinforcing the limits of federal protections such as Section 230.
Sets a Legal Standard: This ruling may inspire other states to enforce or strengthen campaign finance laws to ensure transparency in digital advertising.

State of Washington v. Meta Platforms, Inc., — P.3d —, 2024 WL 4929812 (Wash. Ct. App., Div. 1, Dec. 2, 2024).

December 3, 2024 Right of Publicity, Section 230, Social Media

Section 230 protected Meta from Huckabee cannabis lawsuit

Mike Huckabee, the former governor of Arkansas, sued Meta Platforms, Inc., the parent company of Facebook, for using his name and likeness without his permission in advertisements for CBD products. Huckabee argued that these ads falsely claimed he endorsed the products and made misleading statements about his personal health. He asked the court to hold Meta accountable under various legal theories, including violation of his publicity rights and privacy.

Plaintiff alleged that defendant approved and maintained advertisements that misappropriated plaintiff’s name, image, and likeness. Plaintiff further claimed that the ads placed plaintiff in a false light by attributing statements and endorsements to him that he never made. Additionally, plaintiff argued that defendant had been unjustly enriched by profiting from these misleading ads. Defendant, however, sought to dismiss the claims, relying on the Communications Decency Act at 47 U.S.C. 230, which grants immunity to platforms for third-party content.

The court granted Meta’s motion to dismiss. It determined that Section 230 shielded defendant from liability for the third-party content at issue. The court also noted that plaintiff’s allegations lacked the specificity needed to overcome the protections provided by Section 230. Furthermore, the court emphasized that federal law, such as Section 230, preempts conflicting state laws, such as Arkansas’s Frank Broyles Publicity Protection Act.

Three reasons why this case matters:

Defines Section 230 Protections: It reaffirms the broad immunity tech companies enjoy under Section 230, even in cases involving misuse of publicity rights.
Digital Rights and Privacy: The case highlights the tension between protecting individual rights and maintaining the free flow of online content.
Challenges for State Laws: It shows how federal law can preempt state-specific protections, leaving individuals with limited recourse.

Mike Huckabee v. Meta Platforms, Inc., 2024 WL 4817657 (D. Del. Nov. 18, 2024)

December 1, 2024 Artificial Intelligence, Blockchain, Copyright, Cryptocurrency, non-fungible token, Social Media

X can claim trespass to chattel in data scraping case

X Corp. sued Bright Data Ltd. for unauthorized access to X’s servers and the scraping and resale of data from X’s platform. Plaintiff sought the court’s permission to file a second amended complaint after the court dismissed its prior complaint. The court granted plaintiff’s motion in part and denied it in part, allowing some claims to proceed while dismissing others.

Plaintiff alleged that defendant’s scraping activities caused significant harm to its systems. According to plaintiff, defendant’s automated scraping overwhelmed servers, causing system glitches and forcing plaintiff to purchase additional server capacity. Plaintiff further alleged that defendant used deceptive techniques, including fake accounts and rotating IP addresses, to bypass technical barriers and access non-public data. Plaintiff claimed that these actions violated its Terms of Service, interfered with its contracts, and constituted unfair and fraudulent business practices. Plaintiff also introduced new claims under federal and state anti-hacking laws, including the Digital Millennium Copyright Act and the Computer Fraud and Abuse Act.

The court agreed with plaintiff on several points. It allowed claims related to server impairment, including trespass to chattels and breach of contract, to move forward. The court found that plaintiff’s revised complaint provided sufficient details to plausibly allege harm to its servers and unauthorized access to its systems.

However, the court dismissed claims concerning the scraping and resale of data, ruling that they were preempted by the Copyright Act. Plaintiff had argued that it could prevent defendant from copying user-generated or non-copyrightable data through state-law claims. The court disagreed, holding that such claims conflicted with federal copyright policy, which limits protections for factual data and prioritizes public access. Additionally, the court rejected plaintiff’s argument that defendant’s actions constituted “unfair” business practices, finding no evidence of harm to competition.

Finally, the court allowed plaintiff to proceed with its new anti-hacking claims but left the door open for defendant to challenge these allegations later in the case.

Three Reasons Why This Case Matters

Defines Platform Rights: This case clarifies the limits of platform operators’ ability to control user-generated and public data.
Reinforces Copyright Preemption: The decision highlights the importance of federal copyright laws in preventing conflicting state-law claims.
Explores Anti-Hacking Laws: It illustrates how federal and state anti-hacking statutes may be used to address unauthorized access in the digital age.

X Corp. v. Bright Data Ltd., 2024 WL 4894290 (N.D. Cal., Nov. 26, 2024)

November 29, 2024 Anonymity, Defamation, Electronic Discovery, Litigation

K-Pop companies seek U.S. court’s help to unmask anonymous YouTubers

Three South Korean entertainment companies turned to a U.S. court to assist in identifying anonymous YouTube users accused of posting defamatory content. The companies sought permission to issue a subpoena under 28 U.S.C. § 1782, a law that allows U.S. courts to facilitate evidence collection for foreign legal proceedings.

Applicants alleged that the YouTube channels in question posted false claims about K-pop groups they manages, including accusations of plagiarism and deliberate masking of poor vocal performances. Applicants – who had already initiated lawsuits in South Korea – needed the subpoena to obtain identifying information from Google, the parent company of YouTube, to pursue these claims further. Google did not oppose the request but reserved the right to challenge the subpoena if served.

The court ruled in favor of applicants, granting the subpoena. It determined that the statutory requirements under § 1782 were met: Google operates within the court’s jurisdiction, the discovery was intended for use in South Korean legal proceedings, and applicants qualified as interested persons. The court also weighed discretionary factors, such as the non-involvement of Google in the South Korean lawsuits and the relevance of the requested information, finding them supportive of applicants’ request.

The court emphasized that the subpoena was narrowly tailored to identify the operators of the YouTube channels while avoiding unnecessary intrusion into unrelated data. However, it also sought to ensure procedural fairness, requiring Google to notify the affected individuals, who would then have 30 days to contest the subpoena.

Three Reasons Why This Case Matters:

International Legal Cooperation: The case illustrates how U.S. courts can assist in resolving international disputes involving anonymous online actors.
Accountability for Online Speech: It highlights the balance between free expression and accountability for potentially harmful content on digital platforms.
Corporate Reputation Management: The decision reflects how businesses can use legal avenues to protect their reputation across jurisdictions.

In re Ex Parte Application of HYBE Co., Ltd., Belift Lab Inc., and Source Music Co., Ltd., 2024 WL 4906495 (N.D. Cal. Nov. 27, 2024).

November 24, 2024 Litigation, Social Media, Trademarks

People tagging the wrong place on Instagram did not help prove trademark infringement

The City and County of San Francisco sued the Port of Oakland and the City of Oakland alleging trademark infringement and unfair competition. The dispute began when Oakland renamed its airport “San Francisco Bay Oakland International Airport,” which San Francisco claimed created confusion and harmed the brand of its own airport, San Francisco International Airport (SFO). San Francisco asked the court for a preliminary injunction to stop Oakland from using the new name while the case proceeded.

The court granted the motion in part, finding that the new name improperly implied an affiliation between the airports. However, it rejected claims that Oakland’s actions caused confusion during online ticket searches or at the point of sale. Social media evidence featured prominently in the case but ultimately did not sway the court’s decision.

San Francisco argued that social media posts demonstrated actual consumer confusion. For example, some users on platforms such as Instagram tagged images of SFO with Oakland’s new name, while others expressed uncertainty about which airport they were referencing. Despite these examples, the court found the evidence weak and unconvincing. It noted that most of the posts lacked context, such as whether the users were actual travelers or how their confusion affected any purchasing decisions. Additionally, the court questioned the sincerity of some posts, particularly where users repeated the same confusion across multiple platforms or appeared to joke about the issue.

While the court acknowledged that social media evidence could have value, it stressed the need for reliability. Without clear patterns or evidence of widespread confusion, the posts provided little support for San Francisco’s broader claims.

Three reasons why this case matters:

The Limits of Social Media Evidence: This case demonstrates that courts demand robust, contextualized proof when social media posts are used to argue consumer confusion.
Trademark Law in the Digital Age: The case highlights the challenges of protecting trademarks in a world where branding and consumer perception are shaped online.
Impacts on Regional Branding: The ruling underscores the importance of clear naming practices for public infrastructure, especially in areas with competing interests.

City and County of San Francisco v. City of Oakland, 2024 WL 5563429 (N.D. Cal., November 12, 2024)

November 21, 2024 Litigation, Section 230, Social Media

Disabled veteran’s $77 billion lawsuit against Amazon dismissed

A disabled Army veteran sued Amazon alleging “cyberstalking” and “cyberbullying” on its gaming platform, New World. Plaintiff claimed Amazon allowed other players and employees to engage in harassment, culminating in his being banned from the platform after over 10,000 hours and $1,700 of investment. Plaintiff sought $7 billion in compensatory damages and $70 billion in punitive damages, asserting claims for intentional infliction of emotional distress, gross negligence, and unfair business practices. Plaintiff also filed motions for a preliminary injunction to reinstate his gaming account and to remand the case to state court.

The court, however, dismissed the case. It granted plaintiff in forma pauperis status, allowing him to proceed without paying court fees, but ruled that his complaint failed to state any claim upon which relief could be granted. The court found no grounds for allowing plaintiff to amend the complaint, as any amendment would be futile.

The court dismissed the case on several legal principles. First, it found that Amazon was immune from liability under the Communications Decency Act at 47 U.S.C. §230 for any content posted by third-party users on the New World platform. Section 230 protects providers of interactive computer services from being treated as publishers or speakers of user-generated content, even if they moderate or fail to moderate that content.

Second, plaintiff’s claims about Amazon employees’ conduct were legally insufficient. His allegations, such as complaints about bad customer service and being banned from the platform, failed to meet the standard for intentional infliction of emotional distress, which requires conduct so outrageous it exceeds all bounds tolerated in a civilized society. Similarly, plaintiff’s gross negligence claims did not demonstrate any extreme departure from reasonable conduct.

Finally, in the court’s view, plaintiff’s claim under California’s Unfair Competition Law (UCL) lacked the necessary specificity. The court found that poor customer service and banning a user from a platform did not constitute unlawful, unfair, or fraudulent business practices under the UCL.

Three Reasons Why This Case Matters

Clarifies Section 230 Protections: The case reinforces the broad immunity granted to online platforms for third-party content under Section 230, even when moderation decisions are involved.
Defines the Limits of Tort Law in Online Interactions: It highlights the high bar plaintiffs must meet to succeed on claims such as intentional infliction of emotional distress and gross negligence in digital contexts.
Sets Guidance for Gaming Platform Disputes: The decision underscores the limited liability of companies for banning users or providing subpar customer support, offering guidance for similar lawsuits.

Haymore v. Amazon.com, Inc., 2024 WL 4825253 (E.D. Cal., Nov. 19, 2024)

November 19, 2024 Litigation, Unfair Competition

Beauty products company wins preliminary injunction against online sellers

conterfeit

Plaintiff sued a group of unnamed individuals, corporations, and online sellers, alleging that they were selling counterfeit versions of plaintiff’s patented beauty products through various e-commerce platforms. Plaintiff requested a preliminary injunction to immediately stop these activities and freeze defendants’ financial accounts. The United States District Court for the Southern District of Florida granted the request, seeking to protect plaintiff’s intellectual property rights while the case continued.

Plaintiff argued that defendants had infringed on its utility and design patents by manufacturing, promoting, and selling counterfeit products that mimicked its patented designs and technology. Investigators hired by plaintiff purchased items from defendants’ online stores and determined they were unauthorized copies. Plaintiff claimed these actions caused irreparable harm to its brand reputation and financial well-being.

The court evaluated whether plaintiff met the legal standard for a preliminary injunction, which requires showing a likelihood of success on the merits, irreparable harm without relief, a balance of hardships favoring plaintiff, and alignment with the public interest. The court found that plaintiff provided strong evidence that defendants were selling counterfeit goods in violation of its patents. Defendants had no authorization to use plaintiff’s intellectual property, and their activities risked confusing consumers and damaging plaintiff’s reputation.

The court determined that the harm to plaintiff outweighed any potential harm to defendants, especially since defendants were engaging in illegal activities. The public interest also supported the injunction, as it protected consumers from being misled into buying counterfeit products. The court froze defendants’ financial accounts to prevent them from transferring funds out of the court’s jurisdiction.

Why This Case Matters:

Intellectual Property Protection: The ruling reaffirms the importance of enforcing patent rights against counterfeiters in the e-commerce space.
Consumer Protection: By halting counterfeit sales, the court safeguarded consumers from buying inferior and unauthorized products.
Digital Enforcement Tools: The decision highlights the role of injunctions and financial account freezes as tools to combat online intellectual property infringement.

Foreo Inc. v. The Individuals, Corporations, Limited Liability Companies, Partnerships, and Unincorporated Associations Identified on Schedule A, 2024 WL 4652093 (S.D. Fla. Nov. 1, 2024).

November 15, 2024 Antitrust, Social Media

Meta faces antitrust trial: FTC’s case against Instagram and WhatsApp acquisitions moves forward

The Federal Trade Commission (FTC) is taking Facebook’s parent company, Meta Platforms, to task over allegations that Meta’s acquisitions of Instagram in 2012 and WhatsApp in 2014 were anticompetitive. A recent ruling in the case allowed the FTC’s key claims to proceed, marking a significant step in the government’s effort to curtail what it alleges is Meta’s illegal monopoly over personal social networking (PSN) services. While some parts of the case were dismissed, the trial will focus on whether Meta’s past actions stifled competition and harmed consumers.

The FTC’s claims: Crushing competition through acquisitions

The FTC contended that Meta acted unlawfully to maintain its dominance in social networking by acquiring Instagram in 2012 and WhatsApp in 2014 to neutralize emerging competition. According to the agency, Instagram’s rapid rise as a mobile-first photo-sharing platform posed a direct threat to Meta’s efforts to establish a strong presence in the mobile space, where its applications were underperforming. WhatsApp, the FTC argued, was a leader in mobile messaging and had potential to expand into personal social networking, making it another significant competitive threat. The FTC alleged that Meta purchased these companies not to innovate but to eliminate rivals and consolidate its monopoly.

The case reached this stage after Meta filed a motion for summary judgment, seeking to have the case dismissed without trial. Meta argued that the FTC’s claims lacked sufficient evidence to support its allegations and that the acquisitions benefited consumers and competition. The court denied Meta’s motion in large part, finding that substantial factual disputes existed about whether the acquisitions were anticompetitive. The court determined that the FTC had presented enough evidence to show that Instagram and WhatsApp were either actual or nascent competitors when acquired.

The court’s analysis highlighted internal Meta documents and statements from CEO Mark Zuckerberg as particularly persuasive. These documents revealed that Instagram’s growth was a source of concern at Meta and that WhatsApp’s trajectory as a mobile messaging service could have positioned it as a future competitor. Based on this evidence, the court ruled that the FTC’s claims about the acquisitions merited a trial to determine whether they violated antitrust laws.

However, the court dismissed another FTC claim alleging that Meta unlawfully restricted third-party app developers’ access to its platform unless they agreed not to compete with Facebook’s core services. The court found that this specific allegation lacked sufficient evidence to proceed, narrowing the scope of the trial to focus on the acquisitions of Instagram and WhatsApp.

Meta’s defenses and their limitations

Meta of course pushed back against the FTC’s case, arguing that its acquisitions ultimately benefited consumers and competition. It claimed Instagram and WhatsApp have thrived under Meta’s ownership due to investments in infrastructure, innovation, and features that the platforms could not have achieved independently. Meta also contended that the FTC’s definition of the market for personal social networking services was too narrow, ignoring competition from platforms such as TikTok, YouTube, LinkedIn, and X.

However, the court rejected some of Meta’s defenses outright. For example, Meta was barred from arguing that its acquisition of WhatsApp was justified by the need to strengthen its position against Apple and Google. The court found this rationale irrelevant to the antitrust claims and insufficient as a defense. Meta’s arguments about broader market competition will be tested at trial, but the court found enough evidence to support the FTC’s narrower focus on personal social networking services.

Three Reasons Why This Case Matters:

Defining Market Boundaries: The case could set new standards for how courts define markets in the tech industry, particularly when dealing with overlapping functionalities of platforms such as social media and messaging apps.
Reining in Big Tech: A trial outcome in favor of the FTC could embolden regulators to pursue other tech giants and challenge long-standing business practices.
Consumer Protection: The case highlights the tension between innovation and market power, raising questions about whether tech consolidation truly benefits consumers or stifles competition.

Case Citation

Federal Trade Commission v. Meta Platforms, Inc., Slip Copy, 2024 WL 4772423 (D.D.C. Nov. 13, 2024).

November 7, 2024 Fraud/Misrepresentation, Litigation

Online IP enforcement case runs into difficulties

A recent decision highlights some of the difficulties of enforcing patent rights concerning products on e-commerce platforms. Plaintiff sued defendants over product takedown notices defendants sent to Amazon. The dispute centered around defendants’ claims that plaintiff’s drone product infringed on defendants’ patent, which covers specific sensor and control systems for drones. Defendants had reported this alleged infringement to Amazon, leading to the removal of plaintiff’s product listings. Plaintiff argued that defendants’ claims were made in bad faith and intended to damage its business rather than protect intellectual property rights.

TRO sought against Amazon takedowns

Seeking to reverse the takedown, plaintiff asked the court for a temporary restraining order (a “TRO”) requiring defendants to retract their report to Amazon and halt further takedown attempts related to the patent. Plaintiff claimed that the takedown had caused extensive harm, including loss of customer goodwill, reduced product visibility, and declining sales, especially as the holiday season approached. Plaintiff relied heavily on Amazon as its main sales channel, making the takedown particularly damaging.

TRO denied

The court ultimately denied plaintiff’s request for a TRO. In reaching its decision, the court relied on four key factors: the likelihood that plaintiff would win the case, the severity of harm it faced, the fairness of the request, and the potential impact on public interest. The court found that plaintiff had not demonstrated a clear likelihood of success, as it did not provide convincing evidence that defendants’ patent claim was baseless or made in bad faith. Additionally, the court viewed plaintiff’s losses as primarily economic, which could potentially be compensated with financial damages later, and thus did not meet the threshold for “irreparable harm.”

It would also have been burdensome

The court also noted that plaintiff’s request would require a mandatory injunction, which imposes a high standard of proof. Given that plaintiff had not fully shown that defendants’ actions were entirely groundless, the court refused to compel defendants to retract their report to Amazon.

This case underscores the challenges companies face when their sales depend on e-commerce platforms, where patent claims can lead to sudden and significant losses. While the court acknowledged the harm to plaintiff, it determined that such harm could be addressed through standard litigation, rather than emergency intervention.

Three Reasons Why This Case Matters:

E-commerce Vulnerability: Companies selling through platforms like Amazon face high risks when patent claims arise, as these claims can lead to immediate product delistings and revenue losses.
High Bar for Emergency Relief: This case demonstrates the difficulty of securing rapid court intervention for online takedowns, especially when potential harm might be addressed financially.
Patent Law’s Growing Role in Online Markets: As e-commerce expands, the reach of patent enforcement on major platforms presents distinct challenges and risks for businesses in digital marketplaces.

Zero Cloud One Intelligent Technology (Hangzhou) Co. Ltd., v. Flying Heliball LLC; World Tech Toys, Inc., 2024 WL 4665594 (W.D. Washington, November 4, 2024)

November 3, 2024 Litigation

Court rules on how punitive damages may apply in eBay corporate harassment case

A Massachusetts couple who ran an independent news blog sued eBay for allegedly orchestrating a targeted harassment campaign against them. Plaintiffs owned and operated EcommerceBytes, a trade publication that covered e-commerce, often with critical insights into companies such as eBay. According to plaintiffs, eBay’s executives became increasingly concerned about this coverage and decided to respond in a way that went far beyond normal corporate PR strategies. Instead of addressing the criticism directly, eBay’s former executives allegedly launched a campaign to frighten and silence plaintiffs through harassment, surveillance, and various disturbing tactics. Plaintiffs accused eBay and several of its former employees of planning and executing actions that included sending grotesque packages, stalking plaintiffs in their hometown and even posting false online ads to publicly humiliate them.

Both parties took steps to try to control which state’s law would apply to the issue of punitive damages in the case. Plaintiffs asked the court to apply California law for punitive damages, arguing that much of the alleged harassment campaign had been coordinated from eBay’s headquarters in California. California law allows punitive damages for cases involving malice or oppressive behavior, which could lead to significant financial consequences for the defendant if plaintiffs were successful. In contrast, eBay filed its own motion asking the court to apply Massachusetts law, which generally does not permit punitive damages without specific statutory authorization. eBay argued that Massachusetts law should govern the case since many of the alleged harassment activities—such as physical surveillance and vandalism—occurred in Massachusetts, where plaintiffs lived.

The court ultimately allowed both parties’ motions in part, ruling that some of the claims would be governed by Massachusetts law and others by California law. For certain claims, such as trespass and false imprisonment, the court decided Massachusetts law would apply to punitive damages because those incidents occurred within Massachusetts. But the court ruled that California law would govern claims the claims for intentional infliction of emotional distress and civil conspiracy, since the alleged harassment campaign had been largely planned and coordinated from eBay’s headquarters in California.

Why this case matters:

Corporate Accountability: It shows how far-reaching corporate misconduct can be when unchecked and highlights the need for mechanisms that hold companies responsible for actions against individuals.
Limits of Corporate Power: The alleged conduct underscores the lengths some companies may go to when responding to criticism, raising questions about corporate influence and ethical boundaries.
Guidance for Cross-State Cases: The court’s decision to apply different state laws to various claims sets an example for how courts might handle complex cases that cross state lines and involve conflicting laws.

Steiner v. eBay, Inc., — F.Supp.3d — 2024 WL 4647877 (D. Mass., November 1, 2024)