Nefarious LinkedIn use finally makes it to the courts

TEKsystems, Inc. v. Hammernick, No. 10-99819 (D. Minn., Filed 3/16/2010). [Link to Complaint (PDF)]

Here is an interesting lawsuit that is bound to convince some employers that social media is causing the sky to fall (to the extent they’re not thinking that already).

Minnesota, showing roads and major bodies of water
Image via Wikipedia

An IT headhunting company that does business in the Twin Cities area of Minnesota has filed suit against a former recruiter-employee for breach of her noncompetition agreement. The complaint says that she violated that agreement when she connected on LinkedIn with 20 of the candidates her old firm was working with.

One thing that’s missing from the allegations is when the defendant made these allegedly improper LinkedIn connections. Did she already have them as connections when she left the plaintiff’s employment or did she invite them to connect after she left? The distinction seems like it would be relevant.

No doubt this case should get some attention due to the novelty of the allegations, namely, that the defendant used a social networking site to break the law. But as thinking persons, we should be careful not to sensationalize these facts. When you stop and think about it, how does the fact that the defendant may have used LinkedIn really differentiate the case from one in which she would have used a more conventional form of communication to solicit?

[Thanks to Paul Cherner at the HR Counsel blog for alerting me to this case. More coverage at the Delaware Employment Law Blog and Portfolio.com]

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 § 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.

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:

Anonymous sender of beer pong email gets to remain unknown

A.Z. v. Doe, 2010 WL 816647 (N.J. Super. App. Div. March 8, 2010)

What's not to love about beer pong?

Even if you do just a cursory review of cases that deal with online anonymity, you are bound to come across a 2001 New Jersey case called Dendrite v. Doe. That case sets out a four part analysis a court should undertake when a defamation plaintiff seeks an order to unmask an Internet user who posted the offending content anonymously.

Under Dendrite, a court that is asked by a defamation plaintiff to unmask an anonymous speaker must:

  • require the plaintiff to try to notify the unknown Doe speaker that he or she is the subject the unmasking efforts, and give him or her a reasonable opportunity to oppose the application;
  • require the plaintiff to identify and set forth the exact statements purportedly made by each anonymous poster that plaintiff alleges constitutes actionable speech;
  • require the plaintiff to produce sufficient evidence supporting each element of its cause of action, on a prima facie basis; and
  • balance the defendant’s First Amendment right of anonymous free speech against the strength of the prima facie case presented and the necessity for the disclosure.

The state appellate court in New Jersey recently had occasion to revisit the Dendrite analysis in a case called A.Z. v. Doe. It found that a defamation plaintiff was not entitled to learn the identity of a person who anonymously sent an email that had content and attached photos that allegedly defamed plaintiff. The court found that plaintiff failed to meet the third factor in the Dendrite analysis, i.e., failed to present a prima facie case of defamation.

Beer pong is not for honor students

Someone took pictures of plaintiff playing beer pong at a party and posted them on Facebook. That’s all in good fun, except that plaintiff was a minor and belonged to her high school’s “Cool Kids & Heroes” program. Kids get into that program by making good grades and promising to refrain from bad behavior.

A purported “concerned parent” set up a Gmail account (anonymously) and sent an email to the faculty advisor for the Cool Kids & Heroes program. The email had photos attached showing several of the program’s kids doing things they shouldn’t be doing like drinking and smoking pot. In all fairness it should be noted that the picture of plaintiff only showed her playing beer pong — it didn’t actually show her drinking or smoking, though there were cups and beer cans on the table in front of her.

The faculty advisor forwarded the email and images on to school administrators, and the school also notified the police. But law enforcement apparently took no further action.

Plaintiff filed a defamation lawsuit against the anonymous sender of the email and sent a subpoena to Google to find out the IP address from which the message was sent. Google notified plaintiff that it came from an Optimum Online IP address. So plaintiff sent a subpoena to Optimum Online for the identifying information. The ISP notified its customer Doe, and Doe moved to quash the subpoena.

The trial court granted the motion to quash, concluding that plaintiff failed to meet the fourth Dendrite factor (dealing with the First Amendment). Plaintiff sought review with the appellate court, which affirmed but on different grounds.

Why the defamation claim failed

The appellate court agreed that the motion to quash should be granted (that is, that the anonymous sender of the email message should not be identified). But the appellate court’s reasoning differed. It didn’t even need to get to the fourth Dendrite factor, because it held that plaintiff didn’t meet the third factor (didn’t present a prima facie defamation case).

The big problem with plaintiff’s defamation claim came from the requirement that the statement alleged to be defamatory (in this case, that plaintiff had broken the law) needed to be “false.” The court found five reasons why this element had not been met:

  • Plaintiff submitted no evidence (like an affidavit) that she wasn’t drinking the night the photo was taken.
  • Plaintiff submitted no evidence that law enforcement actually concluded to take no further action. Plaintiff argued their lack of action showed she didn’t break the law.
  • Even if there was evidence that law enforcement decided to take no action, that would not have been relevant to the truth of the question of whether plaintiff was drinking. That would only go to show that law enforcement decided not to do anything.
  • The photograph attached to the email showing plaintiff playing beer pong would lead one to conclude that she was in “possession” of the alcohol on the table, and that was a violation of the law.
  • Doe submitted other photos from Facebook in connection with the motion to quash which showed plaintiff actually holding a beer.

So the court never got to the question of the First Amendment and how it related to the anonymous email sender’s right to speak. The court concluded that because plaintiff had not put forth a prima facie case of defamation, the anonymous speaker should stay unknown.

Beer pong photo courtesy Flickr user elisfanclub under this Creative Commons license.

Manganese dendrites in limestone photo courtesy Flickr user Arenamontanus under this Creative Commons license.

Forwarder of defamatory email protected under Section 230

Hung Tan Phan v. Lang Van Pham, — Cal.Rptr.3d —, 2010 WL 658244 (Cal.App. 4 Dist. Feb. 25, 2010)

Defendant, a veteran of the Vietnamese military, forwarded an email to some other Vietmamese veterans which apparently defamed another veteran. He didn’t just forward the email, though. He added some commentary at the beginning, which said (translated from the original Vietnamese):

Everything will come out to the daylight, I invite you and our classmates to read the following comments of Senior Duc (Duc Xuan Nguyen) President of the Federation of Associations of the Republic of Vietnam Navy and Merchant Marine.

The person who was the subject of the defamatory email sued the forwarder. The trial court dismissed the case, holding that the defendant was immune from liability under the Communications Decency Act at 47 U.S.C. 230.

That section gives immunity from suit to users and providers of interactive computer services who are distributing information provided by a third party. More than three years ago, in Barrett v. Rosenthal, the California Supreme Court held that Section 230 immunity applies to one who further distributes the contents of a defamatory email message.

The plaintiff sought review with the California Court of Appeal. The court affirmed.

The court looked to the Roommates.com case, to which it attributed a test that requires a defendant’s own acts to materially contribute to the illegality of the internet message for Section 230 immunity to be lost.

In this case, the court held that the introductory remarks did not meet the material contribution test articulated in Roommates.com. The court found that “[a]ll [the defendant] said was: The truth will come out in the end. What will be will be. Whatever.”

Email ribbon photo courtesy Flickr user Mzelle Biscotte under this Creative Commons License

File extensions cannot be trademarks

Autodesk, Inc. v. Dassault Systemes Solidworks Corp., 2009 WL 5218009 (N.D. Cal. December 31, 2009)

One of the issues in the case of Autodesk, Inc. v. Dassault Systemes Solidworks was whether Autodesk could claim trademark rights and the letters “DWG”. The .dwg (“drawing”) file extension is the native file format for Autodesk’s flagship product AutoCAD.

File types

Plaintiff Autodesk moved for summary judgment on the trademark issue. The defendant pointed out that the trademark laws do not permit one to claim exclusive rights in trademarks that are merely functional.

During the hearing on the motion, the court asked Autodesk’s counsel to disavow any claim to trademark protection for the letters “DWG” when used for the file extension. Counsel did disavow such claim but held onto Autodesk’s argument that the letters could serve as a word mark to be used on packaging and advertising and marketing materials.

The Court agreed and sided with Autodesk and included in its order language that expressly stated “anyone in the world is free to use .dwg as a file extension as far as Autodesk is concerned.”

Autodesk filed a motion and asked the court to reconsider its holding, arguing that what Autodesk really meant when it disavowed the claim of exclusive rights was that anyone else could use the extension so long as the use was being made with Autodesk’s proprietary technology, or was interoperable with that technology.

The court rejected this argument holding:

File extensions are functional, and functional uses cannot be trademarked. To rule otherwise would invite a clog on commerce, given the millions of software applications. The limited universe of extension permutations would soon be encumbered with claimants and squatters purporting to own exclusive rights to file extensions.

The court went on to say there would be no consumer confusion because,

[T]he primary purpose of a file extension is to tell the computer the type of the file it is handling. A computer is not a consumer. Its “reading” of the file extension is not in connection with a commercial transaction. It doesn’t care who made the file format it is trying to read.

This isn’t the first time the question of whether machine perception of information has been held to not give rise to trademark protection. An analogous situation is the 1-800 Contacts v. WhenU decision in which the Second Circuit held that WhenU did not “use” another company’s trademarks within the meaning of the Lanham Act when it included trademarked terms in an unpublished directory that triggered delivery of contextually relevant advertising.

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.

Lawsuit against state officials for privacy violation moves forward

Welch v. Theodorides-Bustle, — F.Supp.2d —, 2010 WL 22365 (N.D. Fla., January 5, 2010)

Plaintiff sued the Florida Department of Highway Safety and Motor Vehicles and a number of state officials for violation of the federal Driver’s Privacy Protection Act, 18 USC §2721-25. Plaintiff claimed that the defendants turned over a large amount of protected personal information to a private party, and that that party then further disclosed the information to another entity that published the information on the web.

Florida driver

As a result, the personal information of a number of Florida drivers became available for viewing online by anyone.

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

There is an exception to the Driver’s Privacy Protection Act’s prohibition on disclosure of personal information when the disclosure is made by a government agency “in carrying out [the agency’s] functions.” The defendants did not deny that their conduct would violate the Act, but argued that the exception applied. The defendants essentially argued that the mere fact that the disclosure was made by a governmental entity made the disclosure to be automatically carried out in connection with that agency’s function.

The court rejected this ipse dixit assertion, holding that disclosure by a government agency being treated as automatically protected would accordingly make any violation of the Act by the government impossible.

Similarly, the court rejected the defendants’ argument that language in the contract with the entity to which the information had been provided rendered the disclosure proper. The receiving entity promised to use the information only for a proper purpose. But the self-serving recitals in that agreement, without specifying in detail what a proper purpose would be, would not bind third parties.

Alligator car photo courtesy Flickr user jeffdhartman under this Creative Commons license.

Court orders anonymous GQ blogger and accused hacker to be identified

Advance Magazine Publishers v. Does 1-5, No. 09-10257 (S.D.N.Y. Dec. 22, 2009)

Someone accessing the Internet using an AT&T IP address hacked into Conde Nast’s computer system and acquired and published copies of editorial content and the images that were to be in the December 2009 issue of GQ. Those images were later published anonymously on a blog hosted by Google’s Blogger service.

masked cutie

Conde Nast sued in federal court alleging copyright infringement (for the posting of the content) and violation of the Computer Fraud and Abuse Act (for the unauthorized accessing of the Conde Nast servers). Since the identity of the person or persons committing these acts was not known, Conde Nast sued “John Does 1 through 5”. It then filed a motion with the court for permission to serve subpoenas on AT&T and Google to get information with which to give the defendants a name.

The court granted the motion and authorized the subpoenas.

Rule 26(d)
requires that a party demonstrate good cause before expedited discovery will be permitted. In this case, Conde Nast gave four reasons supporting good cause:

  • It had sufficiently pled causes of action under the Copyright Act and the Computer Fraud and Abuse Act
  • AT&T’s server activity logs and Google’s registration data were at risk of being overwritten or purged
  • The scope of the information requested was appropriate — the only items being requested were those sufficient to name the defendants
  • Without the identifying information, the case would be at a standstill and Conde Nast might be left without a remedy

For these reasons the court ordered the anonymous participants to be unmasked.

Masked woman photo courtesy Flickr user Alaskan Dude under this Creative Commons license.

BitTorrent site liable for Grokster style inducement of copyright infringement

Columbia Pictures v. Fung, No. 06-5578 (C.D. Cal. December 21, 2009).

This case came out three weeks ago, but it’s pretty significant and hasn’t gotten the coverage and analysis it deserves. Of course Professor Goldman covered it in a timely manner. But his blogging agility surpasses that of us mere mortals.

Fung and his company Isohunt Web Technolgies ran a number of popular BitTorrent sites where users could find and share torrent files that permitted the downloading of video files. [Here’s how BitTorrent works.] Several Hollywood studios sued Fung and his company for copyright infringement over the operation of the sites and the activites of the sites’ users.

Ostriches don't actually put their head in the sand

The plaintiffs moved for summary judgment on the copyright claims. The court granted the motion.

The court based its ruling on a theory of “secondary liability” — that is, Fung and his company were liable for the copyright infringement (i.e., the distribution of copyrighted movies and TV shows) committed by users of the sites. More specifically, the court held that the defendants induced copyright infringement, citing to the 2005 U.S. Supreme Court decision in MGM v. Grokster.

The defendants’ inducement of copyright infringement

Under Grokster, “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”

In this case, the court found numerous ways that the defendants had induced copyright infringement. Among the defendants’ activities that gave rise to secondary liability were:

  • Providing categories on the sites to assist users in locating and downloading currently-popular movies, and making express statements to third parties to encourage copyright infringement
  • Providing technical support to users who desired to download and view copyrighted materials.
  • Implementing technical features (such as crawling The Pirate Bay) to locate copyrighted material
  • Relying on an advertising based business model that benefitted from high volume traffic drawn by the availability of infringing material

Rejection of the defendants’ DMCA affirmative defense

The court rejected the defendants’ argument that the safe harbors of the Digital Millennium Copyright Act (DMCA) should shield the torrent sites form liability.

A service provider can sail its ship into a DMCA safe harbor if, among other things, it does not have actual knowledge of, or is not willfully blind to, infringing activities being undertaken through its system. Said another way, the limitation of liability afforded by the DMCA is lost if the provider becomes aware of a “red flag” from which infringing activity is apparent.

The court found that the defendants did not qualify for safe harbor protection because of the “overwhelming” evidence that the defendants knew of the infringing activity. The court borrowed from the Aimster case to state that the defendants would not have known of the infringement only if they engaged in an “ostrich-like refusal” to observe what was happening. That willful blindess would not serve as an excuse.

Ostrich photo courtesy of Flickr user Pedronet under this Creative Commons license.

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