facebook – Page 3 – Attorney Evan Brown

February 9, 2012 Employment, Privacy

Teacher fired over Facebook post gets her job back

Court invokes notion of “contextual integrity” to evaluate social media user’s online behavior.

Rubino v. City of New York, 2012 WL 373101 (N.Y. Sup. February 1, 2012)

The day after a student drowned at the beach while on a field trip, a fifth grade teacher updated her Facebook status to say:

After today, I am thinking the beach sounds like a wonderful idea for my 5th graders! I HATE THEIR GUTS! They are the devils (sic) spawn!

Three days later, she regretted saying that enough to delete the post. But the school had already found out about it and fired her. After going through the administrative channels, the teacher went to court to challenge her termination.

The court agreed that getting fired was too stiff a penalty. It found that the termination was so disproportionate to the offense, in the light of all the circumstances, that it was “shocking to one’s sense of fairness.” The teacher had an unblemished record before this incident, and what’s more, she posted the content outside of school and after school hours. And there was no evidence it affected her ability to teach.

But the court said some things about the teacher’s use of social media that were even more interesting. It drew on a notion of what scholars have called “contextual integrity” to evaluate the teacher’s online behavior:

[E]ven 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.

So while the court found the teacher’s online comments to be “repulsive,” having her lose her job over them went too far.

February 1, 2012 Copyright, Defamation, Miscellaneous, Privacy, Right of Publicity, Section 230, Trademarks

Six interesting technology law issues raised in the Facebook IPO

Patent trolls, open source, do not track, SOPA, PIPA and much, much more: Facebook’s IPO filing has a real zoo of issues.

The securities laws require that companies going public identify risk factors that could adversely affect the company’s stock. Facebook’s S-1 filing, which it sent to the SEC today, identified almost 40 such factors. A number of these risks are examples of technology law issues that almost any internet company would face, particularly companies whose product is the users.

(1) Advertising regulation. In providing detail about the nature of this risk, Facebook mentions “adverse legal developments relating to advertising, including legislative and regulatory developments” and “the impact of new technologies that could block or obscure the display of our ads and other commercial content.” Facebook is likely concerned about the various technological and legal restrictions on online behavioral advertising, whether in the form of mandatory opportunities for users to opt-out of data collection or or the more aggressive “do not track” idea. The value of the advertising is of course tied to its effectiveness, and any technological, regulatory or legislative measures to enhance user privacy is a risk to Facebook’s revenue.

(2) Data security. No one knows exactly how much information Facebook has about its users. Not only does it have all the content uploaded by its 845 million users, it has the information that could be gleaned from the staggering 100 billion friendships among those users. [More stats] A data breach puts Facebook at risk of a PR backlash, regulatory investigations from the FTC, and civil liability to its users for negligence and other causes of action. But Facebook would not be left without remedy, having in its arsenal civil actions under the Computer Fraud and Abuse Act and the Stored Communications Act (among other laws) against the perpetrators. It is also likely the federal government would step in to enforce the criminal provisions of these acts as well.

(3) Changing laws. The section of the S-1 discussing this risk factor provides a laundry list of the various issues that online businesses face. Among them: user privacy, rights of publicity, data protection, intellectual property, electronic contracts, competition, protection of minors, consumer protection, taxation, and online payment services. Facebook is understandably concerned that changes to any of these areas of the law, anywhere in the world, could make doing business more expensive or, even worse, make parts of the service unlawful. Though not mentioned by name here, SOPA, PIPA, and do-not-track legislation are clearly in Facebook’s mind when it notes that “there have been a number of recent legislative proposals in the United States . . . that would impose new obligations in areas such as privacy and liability for copyright infringement by third parties.”

(4) Intellectual property protection. The company begins its discussion of this risk with a few obvious observations, namely, how the company may be adversely affected if it is unable to secure trademark, copyright or patent registration for its various intellectual property assets. Later in the disclosure, though, Facebook says some really interesting things about open source:

As a result of our open source contributions and the use of open source in our products, we may license or be required to license innovations that turn out to be material to our business and may also be exposed to increased litigation risk. If the protection of our proprietary rights is inadequate to prevent unauthorized use or appropriation by third parties, the value of our brand and other intangible assets may be diminished and competitors may be able to more effectively mimic our service and methods of operations.

(5) Patent troll lawsuits. Facebook notes that internet and technology companies “frequently enter into litigation based on allegations of infringement, misappropriation, or other violations of intellectual property or other rights.” But it goes on to give special attention to those “non-practicing entities” (read: patent trolls) “that own patents and other intellectual property rights,” which “often attempt to aggressively assert their rights in order to extract value from technology companies.” Facebook believes that as its profile continues to rise, especially in the glory of its IPO, it will increasingly become the target of patent trolls. For now it does not seem worried: “[W]e do not believe that the final outcome of intellectual property claims that we currently face will have a material adverse effect on our business.” Instead, those endeavors are a suck on resources: “[D]efending patent and other intellectual property claims is costly and can impose a significant burden on management and employees….” And there is also the risk that these lawsuits might turn out badly, and Facebook would have to pay judgments, get licenses, or develop workarounds.

(6) Tort liability for user-generated content. Facebook acknowledges that it faces, and will face, claims relating to information that is published or made available on the site by its users, including claims concerning defamation, intellectual property rights, rights of publicity and privacy, and personal injury torts. Though it does not specifically mention the robust immunity from liability over third party content provided by 47 U.S.C. 230, Facebook indicates a certain confidence in the protections afforded by U.S. law from tort liability. It is the international scene that gives Facebook concern here: “This risk is enhanced in certain jurisdictions outside the United States where our protection from liability for third-party actions may be unclear and where we may be less protected under local laws than we are in the United States.”

You have to hand it to the teams of professionals who have put together Facebook’s IPO filing. I suppose the billions of dollars at stake can serve as a motivation for thoroughness. In any event, the well-articulated discussion of these risks in the S-1 is an interesting read, and can serve to guide the many lesser-valued companies out there.

January 25, 2012 Contracts, Copyright

Megaupload takedown reminds us why website terms and conditions can be important

Kashmir Hill pointed out that at least one erstwhile file sharing service has changed its business model in response to the federal government’s action against Megaupload. She observes that:

FileSonic users can’t be too happy to have one of the main features of the site taken away. But the company must be less worried about its breach of contract with existing users than it is about the possibility of getting the Megaupload treatment, i.e., arrest, seizure of its property, and a criminal indictment.

This raises an important point. Any kind of online service that pushes the legal envelope may want to build in some mechanisms to pull back with impunity if it gets freaked out or loses its envelope-pushing courage. Said another way, that service should not make promises to its users that it cannot keep in the event the service wants to change what it is doing.

Some well known user generated content sites do this pretty well already in their terms of service. For example:

Dropbox: “We reserve the right to suspend or end the Services at any time, with or without cause, and with or without notice.”
“YouTube reserves the right to discontinue any aspect of the Service at any time.”
Reddit: “We also reserve the right to discontinue the Program, or change the content or formatting of the Program, at any time without notice to you, and to require the immediate cessation of any specific use of the Program.”
Facebook (being kind of vague): “If you . . . create risk or possible legal exposure for us, we can stop providing all or part of Facebook to you.”

All good examples of foresight in drafting website terms and conditions that help innovative sites with damage control.

November 9, 2011 First Amendment

Employee’s Facebook status update was protected by the First Amendment

Mattingly v. Milligan, 2011 WL 5184283 (E.D.Ark. November 1, 2011)

Plaintiff worked in the county clerk’s office. Her old boss, whom she had supported in the election, lost. Her new boss (the newly-elected county clerk) began cleaning house and laid off some of the staff. Plaintiff survived that round of cuts, but lamented those terminations in a Facebook status update. Empathetic comments from county residents ensued.

The new boss found out about the status update and the comments. So he fired plaintiff. She sued, alleging that the termination violated her right to free speech. The boss moved for summary judgment, but the court denied the motion, sending the case to trial.

Here is some of the relevant Facebook content:

Plaintiff’s status update: So this week not going so good bad stuff all around.

Friend’s comment: Will be praying. Speak over those bad things positively.

Plaintiff’s comment: I am trying my heart goes out to the ladies in my office that were told by letter they were no longer needed…. It’s sad.

* * *

Friend’s comment: He’s making a mistake, but I knew he would, too bad….

* * *

Friend’s comment: I can’t believe a letter would be the manner of delivering such a message! I’m with the others…they will find some thing better and tell them this is an opportunity and not a closed door. Prayers for you and friends.

* * *

Friend’s comment: How could you expect anything else from [defendant], he was an…well nevermind.

Courts addressing claims by public employees who contend that they have been discharged for exercising their right to free speech must employ a two-step inquiry: First, the court must determine whether the speech may be described as “speech on a matter of public concern.” If so, the second step involves balancing the employee’s right to free speech against the interests of the public employer.

In this case, the court found the speech to be on a matter of public concern because:

the statements were made in a “public domain”
those who saw the statements (many of whom were residents of the county) understood them to be about terminations in the clerk’s office
some of the comments contained criticism of the termination decision
six constituents of the new clerk called his office to complain
the press and media had covered the situation

As for the second step in the analysis, namely, balancing the employee’s right to free speech against the interests of the public employer, the court did not even undertake a balancing test, as there simply was no evidence that the status update and the comments disrupted the operations of the clerk’s office.

October 23, 2011 Employment, Litigation

Court requires fired social media employee to return usernames and passwords

Ardis Health, LLC v. Nankivell, 2011 WL 4965172 (S.D.N.Y. October 19, 2011)

Defendant was hired to be plaintiffs’ “video and social media producer,” with responsibilities that included maintaining social media pages in connection with the online marketing of plaintiffs’ products. After she was terminated, she refused to tell her former employers the usernames and passwords for various social media accounts. (The case doesn’t say which ones, but it’s probably safe to assume these were Facebook pages and maybe Twitter accounts.) So plaintiffs sued, and sought a preliminary injunction requiring defendant to return the login information. The court granted the motion for preliminary injunction.

The court found that plaintiffs had come forward with sufficient evidence to support a finding of irreparable harm if the login information was not returned prior to a final disposition in the case:

Plaintiffs depend heavily on their online presence to advertise their businesses, which requires the ability to continuously update their profiles and pages and react to online trends. The inability to do so unquestionably has a negative effect on plaintiffs’ reputation and ability to remain competitive, and the magnitude of that effect is difficult, if not impossible, to quantify in monetary terms. Such injury constitutes irreparable harm.

Defendant argued there would not be irreparable harm because the web content had not been updated in over two years. But the court rejected that argument, mainly because it would have been unfair to let the defendant benefit from her own failure to perform her job responsibilities:

Defendant was employed by plaintiffs for the entirety of that period, and she acknowledges that it was her responsibility to post content to those websites. Defendant cannot use her own failure to perform her duties as a defense.

Moreover, the court found that the plaintiffs would lose out by not being able to leverage new opportunities. For example, plaintiffs had recently hopped on the copy Groupon bandwagon by participating in “daily deal” promotions. The court noted that the success of those promotions depended heavily on tie-ins with social media. So in this way the unavailability of the social media login information also contributed to irreparable harm.

March 30, 2011 Litigation

Court: Mark Zuckerberg lives in California

Ceglia v. Zuckerberg, — F.Supp.2d —, 2011 WL 1108607 (W.D.N.Y. March 28, 2011)

Well, maybe that title is a bit of an oversimplification. Technically the court said that Facebook’s founder is domiciled in California. The issue came up in a breach of contract case against Zuckerberg and Facebook in federal court in New York.

Last year, one Paul Ceglia sued in New York state court, claiming he owns 84 percent of Facebook. Zuckerberg and Facebook removed the case to federal court. Defendants can do that if the court would have subject matter jurisdiction over the case. Since a breach of contract case arises under state law, there needed to be diversity jurisdiction in the case — that is, the parties must be domiciled in different states. (The amount in controversy must also be above $75,000. An 84 percent cut of a multibillion dollar company would seem to meet that criterion.)

Zuckerberg claimed that California had become his domicile since 2004. Ceglia challenged that assertion. In the ConnectU v. Facebook litigation, Zuckerberg had claimed New York as his domicile. And Zuckerberg had the burden of proving his change in domicile by clear and convincing evidence. The court found that such evidence existed, including the following biographical tidbits:

He currently resides in California and has done so continuously since the summer of 2004.
He has no other residences.
He does not own real property in New York, California or elsewhere.
In 2007, he purchased and registered a vehicle in California.
He does not own or lease any other vehicles.
Zuckerberg has paid California resident income taxes since 2004.
He lists his California residence on his federal income tax returns.
He has not filed taxes in any state other than California since 2004.
Since at least 2007, he has been registered to vote in California and has voted in California.
He possess a valid California driver’s license issued in 2006.
His bank and brokerage accounts list his California residence and his investment advisors are located in California.
Zuckerberg receives his mail at a California post office box and at his Facebook office.
Most significantly, however, he is the owner, founder and CEO of a multi-billion dollar corporation with over 1,600 employees and a principal place of business within walking distance to his current residence in Palo Alto, California.

The court found that these facts overwhelmingly showed that as of June 2010 (when Ceglia filed the lawsuit), Zuckerberg had changed his domicile to California and intended to remain there indefinitely. Since diversity jurisdiction existed, the court ordered the case to remain in federal court.