Attorney Evan Brown

October 6, 2010 Personal Jurisdiction

Deliberate exploitation of market subjects GoDaddy to personal jurisdiction in Illinois

uBid v. GoDaddy, — F.3d —, 2010 WL 3768075 (7th Cir. September 29, 2010)

uBid sued GoDaddy in federal court in Illinois, alleging cybersquatting. uBid claimed that GoDaddy — an Arizona-based company — intended to profit in bad faith by registering on behalf of its customers certain domain names that were similar to uBid’s trademarks. uBid alleged that GoDaddy would set up parked pages at those domains, displaying sponsored links to sites run by uBid’s competitors.

The district court dismissed the case, finding that the court lacked personal jurisdiction over GoDaddy. uBid sought review with the Seventh Circuit. On appeal, the court reversed, holding that the exercise of personal jurisdiction over GoDaddy would not violate due process.

Contact with the forum state

The court held that GoDaddy’s activities in Illinois were not continuous or systematic enough for the exercise of general jurisdiction. But applying the standards set forth in Keeton v. Hustler, the court found that GoDaddy’s efforts to exploit the Illinois marketplace were done so thoroughly, deliberately and successfully that it would not be unfair for GoDaddy to appear in court in Illinois.

After all, in part through its ads at Wrigley Field, the United Center and Joliet Speedway, not to mention the numerous Super Bowl ads seen in Illinois, GoDaddy had acquired hundreds of thousands of customers in the state.

Relatedness of claims

In finding that GoDaddy’s contacts with Illinois were sufficiently related to the claims in the case, the court similarly looked to the extent and nature of GoDaddy’s advertising and marketing. The court couched the relatedness in terms of a quid pro quo:

[O]ut-of-state residents may avail themselves of the benefits and protections of doing business in a forum state, but they do so in exchange for submitting to jurisdiction in that state for claims arising from or relating to those activities.

In this case, GoDaddy’s connection with Illinois and uBid’s claims made the relatedness quid pro quo “balanced and reasonable.” GoDaddy’s contacts with Illinois alleged in the complaint and the alleged wrongs committed were so “intimately related” that GoDaddy should not have been surprised to find itself sued in Illinois.

Fair play and substantial justice

Finally, the court examined the question of whether the exercise of personal jurisdiction would comport with traditional notions of fair play and substantial justice. Again, the court’s finding relied on the thoroughness with which GoDaddy had exploited the Illinois marketplace.

Race car image courtesy Flickr user Jr 88 Rules under this Creative Commons license.

October 4, 2010 Computer Crime

Palin email hacker conviction survives motion for acquittal

U.S. v. Kernell, No. 08-CR-142 (E.D. Tenn. September 23, 2010)

A federal jury convicted defendant for a number of crimes related to his hacking into Sarah Palin’s Yahoo email account in September 2008. One of the crimes the jury convicted him of was the “destruction or alteration of a record or document with the intent to obstruct an investigation” (a violation of 18 USC 1519).

After hacking into Palin’s account, but before the formal FBI investigation began, defendant deleted some Palin family pictures he had downloaded from the account, uninstalled his web browser, and defragmented his hard drive.

Defendant moved for a “judgment of acquittal”, arguing that the evidence was insufficent to support his convictions. The court denied the motion.

The court found that the Government offered sufficient proof to support the conviction. Even though defendant preserved (did not destroy) his computer, spoke with an FBI agent investigating the matter and advised his friends to be truthful in what they said about the case, the court looked to the totality of the evidence as supporting defendant’s guilt.

Given that defendant deleted images from his computer that he had downloaded from Palin’s account, and had run web searches on “legalities email” and “soppenaing [sic.] ip addresses”, a rational jury could find him guilty. So the jury verdit stood.

October 2, 2010 Anonymity, Defamation, Section 230

Section 230 shields Google from liability for anonymous defamation

Black v. Google Inc., 2010 WL 3746474 (N.D.Cal. September 20, 2010)

Back in August, the U.S. District Court for the Northern District of California dismissed a lawsuit against Google brought by two pro se plaintiffs, holding that the action was barred under the immunity provisions of 47 USC 230. That section says that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” Plaintiffs had complained about a comment on Google (probably a review) disparaging their roofing business.

Plaintiffs filed and “objection” to the dismissal, which the court read as a motion to alter or amend under Fed. R. Civ. P. 59. The court denied plaintiffs’ motion.

In their “objection,” plaintiffs claimed — apparently without much support — that Congress did not intend Section 230 to apply in situations involving anonymous speech. The court did not buy this argument.

The court looked to the Ninth Circuit case of Carafano v. Metrosplash as an example of a website operator protected under Section 230 from liability for anonymous content: “To be sure, the website [in Carafano] provided neutral tools, which the anonymous dastard used to publish the libel, but the website did absolutely nothing to encourage the posting of defamatory content.” As in Carafano, Google was a passive conduit and could not be liable for failing to detect and remove the allegedly defamatory content.

October 1, 2010 Trade Secrets

Hiring subscribers to access competitor’s database gives rise to misappropriation claim

Reed Construction Data v. McGraw Hill Companies, No. 09-8578 (S.D.N.Y. September 14, 2010)

Court refuses to dismiss lawsuit in which plaintiff accused its competitor of paying others to subscribe to plaintiff’s proprietary database to get confidential information.

Plaintiff and defendant are fierce competitors that provide project news and information to the construction industry. (Really the parties are the only nationwide providers in this market space.) The companies sell subscriptions to their respective databases. Plaintiff requires its subscribers to sign a nondisclosure agreement, making them promise not to share information obtained from the database with others outside the subscriber’s company.

After plaintiff figured out that a copule of its subcribers worked for sham enterprises, it got wise to the notion that defendant had hired those subscribers to access the database. Plaintiff sued, claiming, among other things, misappropriation of confidential information under New York law.

Defendant moved to dismiss for failure to state a claim. The court denied the motion.

To state a claim for misappropriation of confidential information, plaintiff had to allege that defendant used plaintiff’s confidential information for the purpose of securing a competitive advantage. Defendant argued that a tort action for misappropriation was not proper because all that had happened was a use of information in violation of the nondisclosure agreements with the individuals allegedly hired by defendant to access plaintiff’s database.

The court rejected this argument for two reasons. First, plaintiff had not alleged that defendant was a party to the contract. So the liability could not be constrained to just breach of contract. Moreover, the court found, that the tortious conduct of misappropriation had a separate and additional existence apart from any contractual relationship, even if such a relationship did exist. The misappropriation sprang from circumstances extraneous to, and not constituting elements of, the subscription agreements with the parties defendant allegedly hired to access plaintiff’s information.

September 30, 2010 Computer Crime, Privacy

Divorce attorney did not conspire to violate the Electronic Communications Privacy Act

Court declines to recognize secondary liability for civil ECPA violation, holding that defendant’s divorce lawyer could not be a conspirator in a civil action alleging email interception.

Garback v. Lossing, 2010 WL 3733971 (E.D.Mich. September 20, 2010)

Plaintiff sued his ex-wife’s attorney for violation of the Electronic Communications Privacy Act. He claimed that his ex-wife, her attorney and some other defendants (including a computer forensics firm) acted together to violate the ECPA by “hacking” into plaintiff’s email account. The ex-wife allegedly used information gathered in this process to negotiate a more favorable divorce settlement.

The defendant attorney moved to dismiss for failure to state a claim upon which relief may be granted. The court granted the motion.

The court found that in plaintiff’s “inartful” pleading, he had failed to allege that the defendant attorney had actually intercepted or knowingly used information obtained in violation of the ECPA. Plaintiff argued that this failure was not fatal, however, in that he had alleged that the defendant attorney conspired to intercept emails.

Rejecting this argument, the court observed that “normally federal courts refrain from creating secondary liability that is not specified by statute.” Finding no textual support in the ECPA for such secondary liability, the court declined to read ECPA’s scope so expansively. The court found the statute as being clear on who may be liable: those who intercept communications and those who get ahold of those communications knowing they were illegally obtained. So the ECPA claim failed and plaintiff was given leave to replead.

September 29, 2010 Copyright

Downloading a song is not a performance under the Copyright Act

“Performance” under Copyright Act requires “contemporaneous perceptibility”.

U.S. v. ASCAP, — F.3d —, No. 09-539 (2d Cir. September 28, 2010).

Yahoo and RealNetworks commenced a proceeding to determine the rate of a “blanket license” they would pay to ASCAP to perform musical works over the internet (e.g., through streaming services). (As an aside, such actions are brought in the U.S. District Court for the Southern District of New York pursuant to an antitrust consent order entered way back in the 1940’s.)

ASCAP wanted as big a piece of the pie as possible and argued that it should be paid royalties for songs that are downloaded. Remember, ASCAP only collects fees for the public performance (not the distribution or copying) of musical works. So it asked the court to find that each time a user downloads a file, that should be treated as a performance, and thus ASCAP should be entitled to payment.

The district court disagreed that a download is a performance as defined by the Copyright Act. ASCAP sought review with the Second Circuit. On appeal the court affirmed, agreeing that a download is not a performance.

The analysis is straightforward: The Copyright Act grants copyright owners the right, among other things, to perform the copyrighted work publicly. Under the Copyright Act, to “‘perform’ a work means to recite, render, play, dance, or act it, either directly or by means of any device or process.” Since a download plainly is neither a “dance” nor an “act,” the court had to determine whether a download of a musical work fell within the meaning of the terms “recite,” “render,” or “play.”

The court looked to dictionary definitions of the terms “recite,” “render” and “play” to observe that all three actions entail contemporaneous perceptibility. It found that music is neither recited, rendered, nor played when a recording (electronic or otherwise) is simply delivered to a potential listener.

In more detail, the court said that:

[music downloads] are simply transfers of electronic files containing digital copies from an on-line server to a local hard drive. The downloaded songs are not performed in any perceptible manner during the transfers; the user must take some further action to play the songs after they are downloaded. Because the electronic download itself involves no recitation, rendering, or playing of the musical work encoded in the digital transmission, we hold that such a download is not a performance of that work, as defined by [the Copyright Act].

So ASCAP’s piece of the pie was not as big as it wanted.

September 28, 2010 Computer Crime

Lack of unauthorized access kills Computer Fraud and Abuse Act claim

Oce North America, Inc. v. MCS Services, Inc., No. 10-984, 2010 WL 3703277 (D.Md. September 16, 2010)

Plaintiff makes sophisticated commercial grade printers. It also produces complex software that is used to diagnose problems with the printers and to set the functionality of the machines.

A field engineer who used to work for plaintiff allegedly copied some of the software onto his laptop when he worked for plaintiff. Later he went to work for one of the defendant companies, a competitor to plaintiff that also services plaintiff’s machines. Other employees of the defendant allegedly used copies of the software to do their work for defendant.

Plaintiff sued for, among other things, violation of the Computer Fraud and Abuse Act (CFAA), which prohibits unauthorized access to protected computers. Defendants moved to dismiss. The court granted the motion.

The court held that plaintiff failed to allege that the field engineer’s access to the computer containing the software was unauthorized, because he accessed it and copied it to his laptop while he still worked for plaintiff. And that access was authorized.

As for the other defendants, the court held that the defendant company’s access to the software on the various laptops was not unauthorized. The critical point in this portion of the CFAA analysis was on whether access to the actual computer (not access to the software) was unauthorized. The defendant employees allowed access to the laptops onto which the diagnostic software was allegedly installed. So the CFAA claim failed on this basis.

September 27, 2010 Computer Crime, Privacy

Doctor’s wiretapping case under ECPA heads to trial

McCann v. Iroquois Memorial Hospital, No. 08-3420 (7th Cir. September 13, 2010)

Mystery of how doctor’s dictation machine got turned on to record conversation between doctor and hospital employee is a question for the jury and should not have been decided on summary judgment.

Two hospital employees — Dr. Lindberg and the director of physician services, Ms. McCann — had a conversation behind the doctor’s closed office door that the two of them thought was private. In their conversation, the two of them criticized hospital administration. But they did not know that the doctor’s dictation machine was recording what they said.

: Image via Wikipedia

How that machine got turned on is a mystery. Dr. Lindberg had been dictating radiology reports a few minutes before Ms. McCann arrived, so he may have accidentally left the machine running. But the recording of the conversation started in mid-sentence, which discredits that theory.

A member of the hospital’s transcription staff, Ms. Freed, is alleged to have come into the room during this conversation to pick up some papers, and Dr. Lindberg and Ms. McCann believe she surreptitiously turned on the machine. That would seem a plausible explanation, given that Ms. Freed supposedly had an axe to grind with Dr. Lindberg.

The recorded conversation made its way to the transcription staff, and after it was typed out, Ms. Freed forwarded it to the hospital’s CEO. Dr. Lindberg and Ms. McCann filed suit against Ms. Freed and others under the Electronic Communications Privacy Act. They claimed that by secretly turning on the dictation machine and forwarding the transcript, Ms. Freed violated the statute.

The district court granted the defendants’ motion for summary judgment. Plaintiffs sought review with the Seventh Circuit. On appeal, the court reversed in part, finding there was a genuine issue of material fact as to whether Ms. Freed was in the room and secretly turned on the dictation machine.

The court of appeals held that whether Ms. Freed was in the office on the date the recording was made was merely the subject of a “swearing contest,” and that summary judgment is not appropriate to resolve such a contest. The lower court had based its grant of summary judgment largely on the contents of the recording. At the end of the conversation, one can hear the office door close as Ms. McCann leaves. But one cannot hear the door shut with Ms. Freed would have left, during the conversation and after she allegedly turned on the dictation machine.

Viewing the facts in the light most favorable to the plaintiffs, the court found that the absence of such a sound did not prove that Ms. Freed was not there: “[N]othing in the record tells us whether the door could have been closed silently; . . . [Ms.] Freed who was conscious that she was intruding (and, perhaps, that she was being taped) may have closed the door softly to be inconspicuous.”

So the court found that whether Ms. Freed was responsible for making the recording — and by extension whether Ms. Freed intentionally intercepted the conversation between Dr. Lindberg and Ms. McCann in violation of the ECPA — was an issue for the jury, and not one for summary judgment.

September 25, 2010 Privacy

Court: privacy on social networking sites is wishful thinking

Defendant is permitted access to plaintiff’s social networking accounts as part of discovery in personal injury case.

Romano v. Steelcase Inc., — N.Y.S.2d —, 2010 WL 3703242 (N.Y.Sup. September 21, 2010)

Plaintiff sued defendant for personal injury that allegedly caused her to lose her enjoyment of life. During discovery, plaintiff refused to voluntarily turn over the contents of her Myspace and Facebook accounts. So defendant filed a motion to compel plaintiff to consent to having Facebook and MySpace turn over all current and deleted content from the accounts. (That consent was necessary because without it, the sites would violate the Stored Communications Act.) The court granted the motion to compel.

The court found that the information contained in the profiles was “material and necessary” to the case. In drawing its conclusion, the court dispensed with any notion that a user’s privacy settings should affect the analysis. Denying defendant access to the information, the court found, would not only go against New York’s policy favoring liberal discovery, but “would condone Plaintiff’s attempt to hide relevant information behind self-regulated privacy settings.” Plaintiff had put her physical condition at issue, so it was fair for defendant to get evidence that may contradict the assertions of injury.

The court rejected plaintiff’s argument that disclosure of the information would violate her right to privacy under the Fourth Amendment. Fatal to any assertion of privacy was the fact that plaintiff had voluntarily made her information available on the sites. The court looked to earlier New York cases dealing with email to find that plaintiff had no expectation of privacy in the social networking data.

And the court made a sweeping declaration about the state of online privacy that is worth noting. Quoting from a law review article, the court observed that in the social media environment, “privacy is no longer grounded in reasonable expectations, but rather in some theoretical protocol better known as wishful thinking.”

September 23, 2010 Computer Crime, Privacy

Lack of knowledge of interception causes ECPA claims against website owners to fail

Zinna v. Cook, No. 06-1733, 2010 WL 3604386 (D. Colo. September 7, 2010)

Plaintiff sued for violation of the Electronic Communications Privacy Act (ECPA) claiming that defendants intercepted his email messages and posted them to a website called ColoradoWackoExposed.com. Defendants moved for summary judgment. The court granted the motion.

It found that although similarities between messages and website content suggested that emails had been intercepted, there was no evidence showing the interception was “contemporaneous” with the messages’ transmission. (Several federal circuits require such contemporaneity. But see the Seventh Circuit’s recent opinion in U.S. v. Szymuszkiewicz for a different take.)

The court also held there was insufficient evidence to show that defendants knew the information posted on the website came about via any unlawful interception. The plaintiff’s assertions that defendants had worked with a non-party wiretapper failed to convince the court of this knowledge.