Category: Litigation

March 31, 2010 Electronic Discovery, Employment, Litigation, Privacy

Emails sent through Yahoo account using work computer protected under attorney-client privilege

The New Jersey supreme court has held that emails an employee sent to her lawyer using her company-issued computer and a personal Yahoo account are protected by the attorney-client privilege.

Stengart v. Loving Care Agency, Inc., — A.2d —, 2010 WL 1189458 (N.J. March 30, 2010)

The New Jersey courts have a reputation of being protective of “informational privacy.” See, e.g., State v. Reid. A recent decision concerning employee privacy in personal emails adds to that reputation.

Plaintiff-employee used a work-issued laptop to access her Yahoo email account, through which she communicated with her lawyer about her lawsuit against the employer. During the discovery phase of that employment discrimination lawsuit, the employer used computer forensics to recover those Yahoo emails that had been copied to the computer’s temporary internet files folder.

Counsel for plaintiff demanded that the employer turn over the recovered emails, arguing that the communications were protected by the attorney-client privilege. When the employer agreed to turn them over but not discontinue use of the information garnered from them, plaintiff sought relief from the court.

The trial court denied relief and plaintiff sought review with the appellate court. That court reversed, and the employer sought review with the state’s supreme court. The supreme court upheld the appellate court’s decision, holding that the employee had a reasonable expectation of privacy in the communications.

The employer relied on a broadly-written company policy through which the employer reserved the right to review and access “all matters on the company’s media systems and services at any time.” But the court rejected those arguments.

Framework for the analysis

The supreme court considered two aspects in its analysis: (1) the adequacy of the notice provided by the company policy, and (2) the important public policy concerns raised by the attorney-client privilege.

As for the adequacy of the notice provided by the policy, the court found that because the policy did not address the use of password-protected personal email accounts, the policy was “not entirely clear.” As for the importance of the attorney-client privilege, the court lavished it with almost-sacred verbal accoutrements, calling it a “venerable privilege . . . enshrined in history and practice.”

“Intrusion upon seclusion” as source for standard

The court noted that the analysis for a reasonable expectation of privacy in dealings between two private parties was a bit different than the analysis in a Fourth Amendment case. The common law source for the standard in this context is with the tort of “intrusion upon seclusion.” Under New Jersey law, that tort is committed when one intentionally intrudes, physically or otherwise, upon the solitude or seclusion of another or his private affairs or concerns, in a manner that would be highly offensive to a reasonable person. (This language comes from the Restatement (Second) of Torts ยง 652B.)

In this situation, the court found that plaintiff had both a subjective and objective expectation that the messages would be private. Supporting her subjective belief was the fact that she used a private email account that was password protected, instead of her work email account. And she did not store her password on the computer. Her belief was objectively reasonable given the absence of any discussion about private email accounts in the company policy.

Plaintiff’s expectation of privacy was also bolstered by the fact that the email messages were not illegal, nor would they impact the performance of the employer’s computer system. And they bore all the “hallmarks” of attorney-client communications.

For all these reasons, not the least of which the priority of the courts “to keep private the very type of conversations that took place here,” the court found that the conversations were protected by the attorney-client privilege.

March 23, 2010 Litigation

Kentucky Supreme Court: gambling domain names did not have standing

Com. ex rel. Brown v. Interactive Media Entertainment and Gaming Ass’n, Inc., — S.W.3d —, 2010 WL 997104 (Ky. March 18, 2010)

Back in 2008 the Commonwealth of Kentucky took an extraordinary step in its battle against online gambling. It filed an action in state court seeking to take over 141 domain names that the Commonwealth believed were used for illegal gambling sites. The trial court ordered forfeiture of the domain names.

Kentucky

Lawyers arguing against the forfeiture of the domain names sought a “writ of prohibition” from the appellate court, asking that court to prevent the forfeiture of the domain names. The lawyers appearing before the appellate court fell into two categories: those purporting to actually represent certain domain names (not the domain names’ owners) and those representing gambling trade associations whose members purportedly included some of the registrants of the affected domain names.

The appellate court granted the writ of prohibition. The Commonwealth sought review with the state supreme court. The supreme court dismissed the writ because those arguing against it lacked standing.

Who’s interest was at stake?

The court noted that only a party with a “judicially recognized interest” could challenge the forfeiture of the domain names. The court rejected the notion that the domain names could represent themselves:

An internet domain name does not have an interest in itself any more than a piece of land is interested in its own use. Just as with real property, a domain name cannot own itself; it must be owned by a person or legally recognized entity.

As for the gambling associations, the court held that there could be no “associational standing” because none of the associations would identify any of their members. Associational standing is when an organization (say, for example, the NAACP or a labor union) files suit on behalf of its members. One of the fundamental requirements of associational standing a showing that members of the association would have the right to sue in their individual capacities. Since there was no evidence as to whose interests the associations represented, there was no basis to conclude that the associations’ members would have standing to sue in their own right.

So the court sent the matter back down to the appellate court with orders to vacate the writ of prohibition. But the supreme court also hinted that those affected by the forfeiture could get another bite at the apple: “If a party that can properly establish standing comes forward, the writ petition giving rise to these proceedings could be re-filed with the Court of Appeals.” One would think that at least one brave soul will step forward. Some in the industry seem to hope so.

Other accounts of this story:

January 26, 2010 Computer Crime, Contracts, Litigation

Wait just a second . . . isn’t online gambling illegal?

Wong v. Partygaming Ltd., — F.3d —, 2009 WL 4893955 (6th Cir. December 21, 2009)

The Sixth Circuit’s recent opinion in the case of Wong v. Partygaming is interesting if you’re a civil procedure wonk and care about things like which law applies to determine the enforceability of forum selection clauses in website terms and conditions and what factors a court should consider when dismissing a case on the basis of forum non conveniens.

bling

The most intriguing part of the case, however, comes from Judge Merritt’s concurrence, in which he addresses the significance of the fact that the terms of service for an online gambling website are probably illegal.

The majority opinion painstakingly analyzed whether the district court abused its discretion in dismissing, of its own will (or “sua sponte” as stodgy lawyers like to say), the plaintiffs’ suit against an online gambling website. The plaintiffs had alleged that the site fraudulently misrepresented that there was no collusion among other online gamblers, and that the site did not target people with gambling problems. The website terms of service contained a forum selection clause naming Gibraltar as the jurisdiction in which disputes were to be heard.

The appellate court affirmed the lower court’s decision that the case should be dismissed and that Gibraltar (which follows English law) would be a suitable and not-too-inconvenient forum. But the majority opinion said nothing about the legality of online gaming.

That’s where Judge Merritt picked up in the concurrence. He agreed that the matter should have been dismissed in favor of it being heard in Gibraltar — that’s why he concurred and did not dissent. His reasoning differed from that of the majority.


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Judge Merritt observed that the plaintiffs’ logic was inconsistent. They had argued that Ohio law should apply to the terms of service. But under Ohio law (and federal statutes like RICO), the subject matter of the contract would probably have been illegal and therefore void. Not to mention the fact that the conduct could send the parties to jail.

The judge wrote that something analogous to the principle of lenity — and not necessarily a rigorous analysis of the forum selection clause and the doctrine of forum non conveniens — should underlie the dismissal of the lawsuit. Lenity requires that when the question of criminal liability is ambiguous, interpretation should be made in favor of the defendant (see McNally v. United States). Since online gambling presumably was not illegal under the law of Gibraltar, the more lenient stance would be to see the matter litigated there.

Bling photo courtesy Flickr user PhotoDu.de under this Creative Commons license.

January 2, 2010 Litigation

Some thoughts on jurors doing internet research – keep the process clamped down

People v. Carmichael, — N.Y.S.2d —, 2009 WL 5126920, (N.Y.A.D. 4 Dept., Dec 30, 2009)

A recent decision from a New York appellate court gives us occasion to think about the problem of jurors doing web research to find information relating to the case.

The Carmichael Case

A jury convicted one Carmichael of murder. One of the jurors did some internet research during the trial on the question of whether the gunshot wound on the victim was a close contact wound or was inflicted from a distance. When Carmichael discovered the juror’s research, he moved to set aside the jury’s verdict. He argued that the juror’s misconduct caused prejudice to a substantial right.

Jurors Only -- no outside influences!

The trial court denied the motion and Carmichael sought review. On appeal, the court held that the trial court properly denied the motion to set aside the verdict.

It found that Carmichael suffered no prejudice to a substantial right because the juror’s testimony at a hearing on the matter showed that the information found during the internet research was not helpful, that he remained confused even after the research, and that he based his verdict only on the evidence presented at trial.

The Modern Person’s Connection to the Web

The sense of connection that the modern person feels within the web causes an intriguing disruption to the traditional method of the jury trial system. It calls us to evaluate whether it’s fair to characterize conduct like that of the Carmichael juror as “misconduct.” As this Time article notes (and as we all know from our own experiences), it is natural for jurors to desire background, contextual information about the matter being considered.

The tension applies to the problem of jurors acquiring information concerning the case as well as the problem of jurors distributing information they have, or making inappropriate connections with others in the process. The past few months have shown us, for example, stories of improper attempts by jurors to friend witnesses, prohibitions on judges connecting with lawyers, questions of witness intimidation through Facebook, and orders prohibiting courtroom tweeting.

In most instances this tendency to want and share information is a positive attribute. Skepticism, rationality and transparency are noble qualities. But information crossing the abstract borders of the trial court can jeopardize the fairness that the process has historically ensured. It’s no small problem. Even Britain’s Lord Chief Justice recognizes that the ability to so easily get information external to the case “changes the whole orality tradition [i.e., oral testimony] with which we are familiar.”

It’s not a new problem. I was writing about it almost five years ago. Here’s a post I wrote and a podcast episode I did about it back in 2005.

Keep ’em Clamped Down

At the most general level there are two options for handling the present tension. Courts could assimilate the modern tendency and simply leave the process unchecked — allowing information to flow in and out as if on the breeze. The other option would be to clamp down, as the courts in Michigan have done, enacting rules that prohibit jurors doing research and disseminating information during the proceedings.

Our tradition should tell us to go with the latter, that is, clamping down. Looking at it a certain way, there is nothing different in kind occasioned by modern communication methods that mandates information to be free flowing. Though in the past it would have been less feasible, it would not have been impossible for jurors to share information during the process or do external research during off hours. To foster the fairness of the proceedings, courts have historically fortified the abstract walls of the courtroom, permitting the jurors only to consider the evidence made a part of the record. Think about it — that’s the entire basis for having rules of evidence in the first place.

So even though it’s easier to get information these days, and even though jurors want to do that (and in most situations outside of jury duty should be encouraged to do so), there is no good reason not to enforce strict regulations prohibiting outside research. Whether a juror should be permitted to share information during the process is more subtle — there are more concerns there about openness in the process implicated. Absent national security or other similar reasons, we generally don’t want proceedings to be incommunicado.

The solution should not be an assimilation and accompanying dissolving of the borders of the walls around the process, but should come from education of the jury pool. The quasi-closed system of the proceedings, moderated by rules of evidence helps ensure fairness and accuracy. To the extent jurors are helped to understand such a notion of “information regularity,” the more likely they are to see that it makes good sense.

Jurors only photo courtesy Flickr user dmuth under this Creative Commons license.

November 4, 2009 Evidence, Litigation

Robbery conviction overturned because prosecutor played YouTube video during closing argument

Miller v. State, 2009 WL 3517627 (Ind. App. October 30, 2009)

Appellant Miller and his dad robbed Wedge’s Liquor Store in Logansport, Indiana back in November 2007. During the robbery Miller pulled out a shotgun and pointed it at the clerk’s face.

Get your grubby paws off my YouTube image

During closing argument at trial, the prosecutor showed the jury a video from YouTube to illustrate “how easy it was to conceal a weapon inside clothing.” The video was not admitted as evidence but was used merely as a demonstrative aid. The jury convicted Miller and the court sentenced him to 18 years in prison.

Miller appealed his conviction, arguing that the trial court made a mistake in letting the jury see the YouTube video. The court agreed with Miller and reversed.

The court noted that experiments and demonstrations may be permitted during trial if they will aid the court and jury. But in this case the court of appeals found that the YouTube video showing how weapons could be concealed could not possibly provide such aid. The state conceded in its appeallate brief that Miller’s defense theory was mistaken identity. So “the whole issue about the ability to hide weapons under clothing was ultimately unimportant.”

Moreover, before showing the video to the jury, the prosecutor said that the video “[had] nothing to do with this case.” The court of appeals agreed with Miller’s argument that the video “[brought] alive the passions of the jury . . . and suggested Miller was not only the robber but that he also . . . intended to . . . cause injury or death.” The video “was irrelevant, prejudical, and confused issues. . . .”

YouTube evidence picture courtesy Flickr user PIAZZA del POPOLO under this Creative Commons license.

October 26, 2009 Contracts, Litigation

Court upholds eBay forum selection clause

Tricome v. Ebay, Inc., 2009 WL 3365873 (E.D. Pa. October 19, 2009)

Everyone who signs up to use eBay has to assent to the terms of eBay’s User Agreement. Among other things, the User Agreement contains a forum selection clause that states all disputes between the user and eBay must be brought to court in Santa Clara County, California.

After eBay terminated plaintiff Tricome’s account, Tricome sued eBay in federal court in Pennsylvania. eBay moved to dismiss or to at least transfer the case, arguing that the forum selection clause required it. The court agreed and transferred the case to the U.S. District Court for the Northern District of California.

Plaintiff had argued that the court should not enforce the forum selection clause because it was procedurally and perhaps substantively unconscionable. The court found the agreement not to be procedurally unconscionable because Plaintiff did not have to enter into the agreement in the first place — he only did it to increase his online business. Furthermore, eBay did not employ any high pressure tactics to get Plaintiff to accept the User Agreement. Moreover, eBay had a legitimate interest in not being forced to litigate disputes all around the country.

The court likewise found the User Agreement was not substantively unconscionable either. It would not “shock the conscience” for a person to hear that eBay — an international company — would undertake efforts to focus litigation it is involved with into a single jurisdiction. Furthermore, having the forum selection clause would conserve judicial and litigant resources, in that parties and the courts would know in advance where the appropriate place for disputes concerning eBay would be heard. Finally (and rehashing an earlier point regarding procedural unconscionability), Plaintiff had a meaningful choice — he could have decided not to do business on eBay in the first place.

Map photo courtesy Flickr user sidewalk flying under this Creative Commons license.

June 18, 2009 Copyright, Cybersquatting, Litigation, Privacy

Record companies win $1.92 million in case against individual file sharer

There has only been one copyright infringement case filed against an individual accused of illegally sharing music files over the internet to actually go to trial. That’s the case of Capitol Records v. Jammie Thomas. In October 2007, a jury in the U.S. District Court for the District of Minnesota returned a verdict of $222,000 against Ms. Thomas. The court on its own motion vacated that judgment, and ordered a retrial. That retrial concluded on June 18, 2009, with a judgment of a whopping $1.92 million against Ms. Thomas.

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June 16, 2009 Litigation, Miscellaneous

Domain name not tangible property that could satisfy judgment

Palacio del Mar Homeowners Assn., Inc. v. McMahon, — Cal.Rptr.3d —, 2009 WL 1668294 (Cal. App. 4 Dist. June 16, 2009)

A California state court entered a $40,000 judgment against defendant McMahon in favor of plaintiff homeowners association. The homeowners association tried to collect the money from McMahon, seeking a “turnover” of property McMahon owned. Among the items the homeowners association sought was the domain name ahrc.com, registered in the name of McMahon’s wife.

The trial court permitted the domain name to be turned over to the homeowners association to satisfy the judgment. McMahon sought review with the California Court of Appeal. That court reversed and vacated the turnover order.

The court gave several reasons for reversing the lower court. The most interesting reason, however, dealt with the very nature of domain names. The provision in California law allowing turnover of property limits itself to tangible property that can be “levied upon by taking it into custody.” Looking to the case of Network Solutions, Inc. v. Umbro International, Inc., 529 S.E.2d 80 (Va. 2000), the court held that a domain name registration is not property, but merely supplies the intangible contractual right to use a unique domain name for a specified period of time. Even if the registration were property, it was not something that could be taken into custody.

March 17, 2009 Computer Crime, Litigation

Facebook message was not witness tampering

Maldonado v. Municipality of Barceloneta, 2009 WL 636016 (D. Puerto Rico March 11, 2009)

Diaz was a defendant in a federal case in which Febus was a witness for the plaintiff. Diaz invited Febus to join a Facebook group, but Febus declined. Later Diaz sent a message through Facebook which, after translation, read as follows:

If you want to see the evidence that exists against the municipality let me know so that you can inform yourself well and please consult with a lawyer your civil responsibilities as far as defamation. Soon we will be filing a lawsuit and you could be included. My only request is that you are objective when mentioning my name.

Febus sought a protective order under the federal witness tampering statute, 18 U.S.C. 1512 which provides, in relevant part, that “[w]hoever knowingly uses intimidation, threatens, or corruptly persuades another …, or attempts to do so, … with [the] intent to … cause or induce any person to … withhold testimony … from an official proceeding[,]” is guilty under the statute.

The court denied the motion for protective order, finding that there was no evidence, neither raised by the plaintiff nor observable through inference, that Diaz intended to intimidate Febus. “This court can only see one threat in his Facebook message: the threat of future litigation. This is an insufficient basis for finding witness tampering.”

February 23, 2009 Contracts, Litigation

Clickwrap binding despite claim of no opportunity to read terms

Via Viente Taiwan, L.P. v. United Parcel Service, Inc., 2009 WL 398729 (E.D. Tex. February 17, 2009)

A federal court in Texas held the clickwrap agreement between United Parcel Service and one of its customers was binding. After plaintiff Via Viente sued UPS in Texas, UPS moved to transfer venue to the Northern District of Georgia, citing to a forum selection clause in a license agreement governing Via Viente’s use of a UPS-provided software program that allowed Via Viente to print labels and manage product shipments.

Via Viente argued that the clickwrap agreement (and by extension the forum selection clause) was not binding because a UPS technician installed the application on a Via Viente computer, and therefore Via Viente never had a chance to agree to the terms. The court rejected that argument for the following three reasons:

  • Via Viente was a sophisticated company and “should have been aware that terms of service were forthcoming” after having signed the general Carrier Agreement with UPS that required the use of the software;
  • It was “difficult to believe” that Via Viente would have left the UPS technician installing the software unsupervised. Moreover, it was not UPS’s practice to install the software unsupervised;
  • Via Viente had kept the benefit of the bargain (convenience and “palatable” shipping costs) so it would have been inequitable to allow it to disavow provisions it did not like.

After finding the clickwrap agreement to be binding, the court went on to find the forum selection clause enforceable, and transferred the matter to the Northern District of Georgia.

EULA photo courtesy Flickr user johntrainor under this Creative Commons license.

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