NPR reports:
An Australian record label may have picked a fight with the wrong guy. The label sent a standard takedown notice threatening to sue after YouTube computers spotted its music in a video. It turns out that video was posted by one of the most famous copyright attorneys in the world, and Lawrence Lessig is suing back. … Lessig is suing Liberation Music because he wants labels to stop relying on automated systems to send out takedown notices, he says.
Whenever consumers use credit cards, merchants pay swipe fees, which are typically passed along to all consumers in the form of higher prices. American consumers pay the highest swipe fees in the world—eight times those paid by Europeans. These fees, which amount to about $50 billion annually, are highly regressive: low-income and minority cash customers end up subsidizing high-income credit customers. Unfortunately, most consumers don’t know about the fees. And even those who do typically can’t do anything about them.
Merchants are, however, permitted to charge different prices to consumers who pay with credit versus cash, which would give consumers the option to choose a lower-cost payment method in exchange for lower prices. The credit-card lobby has long fought to stop merchants from being able to implement such dual pricing. Under state laws adopted at the industry’s behest, the price difference must be described as a “discount” for cash, not a “surcharge” for credit—even though they’re mathematically identical. In New York, a merchant who uses the wrong word could face criminal prosecution.
A number of New York businesses filed a lawsuit challenging the constitutionality of the New York state law forbidding merchants from imposing a “surcharge” on any customer who pays with a credit card. Along with the Friedman Law Group, we represent five New York merchants: a hair salon, an ice-cream parlor, a liquor store, a martial-arts academy, and an outdoor furniture store. The suit, filed in federal court in Manhattan, was assigned to U.S. District Judge Jed Rakoff.
The main claim is that New York’s law violates businesses’ constitutional right to free speech and that New York state is thus seeking to enforce the credit-card industry’s preferred speech code. Merchants, we contend, should be able to use whatever words are most effective to inform their customers about the high cost of using credit cards, and consumers have a right to receive that communication.
United States District Judge Jed Rakoff issued a lengthy and well reasoned opinion agreeing with the challenge in all respects. The Court held that the law violates the First Amendment and is void for vagueness. The opinion provides a detailed analysis of not only the constitutional arguments, but also the behavioral economics of no-surcharge rules and their regressive economic effect that harms consumers and results in significantly higher prices.
The beginning of the opinion states:
Alice in Wonderland has nothing on section 518 of the New York General Business Law. Under the most plausible interpretation of that section, if a vendor is willing to sell a product for $100 cash but charges $102 when the purchaser pays with a credit card, the vendor risks prosecution if it tells the purchaser that the vendor is adding a 2% surcharge because the credit card companies charge the vendor a 2% “swipe fee.” But if, instead, the vendor tells the purchaser that its regular price for the product is $102, but that it is willing to give the purchaser a $2 discount if the purchaser pays cash, compliance with section 518 is achieved. As discussed below, this virtually incomprehensible distinction between what a vendor can and cannot tell its customers offends the First Amendment and renders section 518 unconstitutional.
You can view the opinion here.
With various sites on the internet giving ratings to businesses in all sorts of professions, the line between what is protected by the Constitution’s First Amendment and what is not can often get blurry, particularly when the reviews are unfavorable. The trial courts have seen defamation lawsuits pertaining to this again and again.
Recently, the Sixth Circuit Court in Cincinnati rejected a $10 million defamation lawsuit which had been filed by Kenneth Seaton, owner of the Grand Resort, a hotel in Pigeon Forge, Tennessee. The resort was ranked No. 1 on TripAdvisor’s 2011 list of “dirtiest hotels”. Next to the hotel’s top position was a picture of a ripped bedsheet and a quote from a user, claiming that “There was dirt at least 1/2″ inch thick in the bathtub which was filled with dark hair.” The website also included a thumbsdown sign next to the quote as well as a claim that “87% of reviewers do not recommend this hotel.”
According to the Court’s decision, “Seaton filed suit in Tennessee state court, alleging claims for defamation and false-light invasion of privacy.” After TripAdvisor filed a motion to dismiss the case, Seaton amended his complaint to include “trade libel/injurious falsehood” and interference with prospective business relationships. TripAdvisor responded by saying that the list was a statement of opinion and, as such, could not be proven true or false because the rankings on the list as well as the concept of “dirtiest” hotel are inherently subjective. A federal district court in Tennessee dismissed the case and Seaton appealed, landing the case in the lap of the Sixth U.S. Court of Appeals in Cincinnati.
At this point, Digital Media Law Project, in connection with Cyberlaw Clinic, filed an amicus brief in the case in support of TripAdvisor “because of the potential impact of Seaton’s argument on journalistic and academic research.” This is because Seaton’s claims could be construed as “challenging the methodology by which TripAdvisor reached its conclusions based on data collected from its users.” However, TripAdvisor’s systematic method of analyzing crowd sourced data to reach conclusions “echoes important techniques for academic research and data journalism” according to Jeff Hermes of Digital Media Law Project.
According to the Court’s decision, “On the webpage in which the list appears, TripAdvisor states clearly ‘Dirtiest Hotels – United States as reported by travelers on TripAdvisor.’ The implication from this statement is equally clear: TripAdvisor’s rankings are based on the subjective views of its users, not on objectively verifiable facts. With this, readers would discern that TripAdvisor did not conduct a scientific study to determine which ten hotels were objectively the dirtiest in America. Readers would, instead, understand the list to be communicating subjective opinions of travelers who use TripAdvisor.”
However, instead of analyzing the list as an opinion based on disclosed data, the court stated instead that the list was “rhetorical hyperbole.” The court further compared TripAdvisor’s list to other online polls and lists such as “Reader’s Digest’s poll of “100 Most Trusted People in America”. Such a comparison implies that TripAdvisor’s list is not only subjective, but frivolous. Hermes fears that, in doing so, the Court “seems to have confused (1) statements not intended to be taken literally and (2) statements intended to be taken literally that nevertheless reflect a subjective judgment. Both fall within the doctrine of opinion as statements that cannot be proven true or false.”
The Grand Resort closed in 2012 and was bought by a holding company.
You can view the Sixth Circuit’s opinion here.
A business owner who had served as president of a trade association filed a lawsuit alleging slander per se and libel per se for statements made to members of that association and others. She named a former client and her successor as association president, among others, as defendants. After the court granted the defendants’ motion to dismiss, an Illinois appellate court affirmed the dismissal. Coghlan, et al v. Beck, et al, 984 N.E.2d 132 (Ill. App. 2013).
The plaintiff, Angelika Coghlan, was the managing partner of an information technology (IT) company, Catwalk Consulting, Inc. She served as the president of the Chicago chapter of the National Association of Women Business Owners (NAWBO-Chicago) from July 2008 until June 2010. In January 2010, Rebecca Busch, CEO of Medical Business Associates, Inc. (MBA), submitted a request for IT services to NAWBO-Chicago’s member listserv. Coghlan claimed that she contacted Busch directly about the request, then posted the request to the listserv, where all members could see it. Coghlan and Bush entered into an agreement for services, and Catwalk provided IT services to MBA for over a year, billing it more than $150,000. MBA notified Catwalk that it was terminating their contract in March 2011.
Valerie Beck succeeded Coghlan as NAWBO-Chicago president in July 2010, and Coghlan stayed on as a member of the board of directors. Beck prepared a written statement for the board’s April 2011 meeting making various claims against Coghlan. The statement called Coghlan a “corrupt Director,” accusing her of intercepting MBA’s listserv posting “for her own benefit,” and alleging other wrongdoing. Id. at 139. That month, Busch sent a letter to IBM’s Global Financing Division, which had financed the Catwalk contract, alleging that Catwalk never delivered. Id. at 140.
Our business attorneys and consumer lawyers have successfully protected businesses from false reviews online and represented consumers wrongly sued to stop them from posting negative reviews about businesses that commit fraud or mistreat their customers.
Many of us have heard stories of people losing their jobs over things said or posted on Facebook. The way we communicate has changed dramatically with the invention and increased use of the internet and employers, employees, and the law are still struggling to catch up.
This blog has already discussed a case in which a sheriff fired six of his employees, allegedly for clicking the “Like” button on the Facebook page of his political opponent. One of those workers, Daniel Ray Carter, filed a lawsuit against B. J. Roberts, the sheriff who fired him. The lawsuit alleged that Carter’s First Amendment rights had been violated and it was filed on behalf of Carter and the five other employees who were fired, allegedly for the same reason. The lawsuit sought compensation for lost back pay and front pay or for a reinstatement in their former positions.
Roberts, after his successful 2009 campaign for sheriff’s office, failed to reinstate six of his employees, all of whom had expressed support for his opponent. Roberts claimed he let some of the workers go because he wanted to replace them with sworn deputies. Others, he said, he fired because of poor performance and because he believed that their actions “hindered the harmony and efficiency of the office.” Despite these allegations, the employees he claims to have fired for poor performance both had consistent evaluations of “above average” or “outstanding” and neither of their direct supervisors or second-level supervisors had ever indicated a performance problem.
U. S. District Judge Raymond Jackson in Norfolk ruled in April 2012 that the “Like” button on Facebook is not equivalent to a statement, and is therefore not protected by the First Amendment. He dismissed the case and the plaintiffs appealed.
In his ruling, Jackson admitted that there have been other courts which have ruled that Facebook posts are constitutionally protected speech. However, he argues that, in those cases the speech in question involved “actual statements” rather than simply clicking a button.
Jackson’s ruling was criticized by constitutional lawyers who argued that other speech conducted online, such as uploading a video, or donating money to a campaign, is protected under the First Amendment, despite the fact that they involve nothing more than the click of a button.
The three-judge 4th Circuit federal appeals court disagreed with Jackson’s decision, ruling instead that Carter’s use of the “Like” button was both “pure speech” and symbolic expression. U.S. Circuit Judge William Traxler compared clicking the button to posting a political campaign sign in a front yard, which is protected under the First Amendment. “On the most basic level,” said Traxler, “clicking on the ‘like’ button both literally causes to be published the statement that the User ‘likes’ something with is itself a substantial statement. That a user may use a single mouse click to produce that message that he likes the page instead of typing the same message with several individual key strokes is of no constitutional significance.”
The appeals court unanimously ruled that clicking Facebook’s “Like” button was protected speech. It therefore partially reversed the lower court’s ruling and reinstated the claims of Carter and two of the other employees who sued. It determined, however, that the three other employees had not provided sufficient evidence that their support of Roberts’s opponent was the reason they were not reinstated.
The court also ruled that Roberts is immune from any monetary judgment. As an “arm of the State” he is “immune from suit for claims against him in that capacity”. He is not immune, however, from the plaintiffs’ claims for reinstatement.
You can view the entire appellate decision here.
An Illinois appellate court reversed a circuit court order dismissing a doctor’s lawsuit for slander per quod against two colleagues. Tunca v. Painter, et al, 965 N.E.2d 1237 (Ill. App. 2012). Two doctors who worked at the same hospital as the plaintiff alleged that the plaintiff was negligent during a surgery, resulting in injury to the patient. The plaintiff alleged that their statements were defamatory, causing damage to his professional reputation and a decline in patient referrals. After the circuit court dismissed multiple claims of slander per se and per quod, the plaintiff appealed. The appellate court held that the defendants’ statements were slanderous on their face, and ruled in the plaintiff’s favor.
The plaintiff, Dr. Josh Tunca, is a surgeon specializing in gynecological oncology. Defendant Dr. Thomas Painter is a vascular surgeon who worked at the same hospital. Defendant Dr. Daniel Conway was chairman at the time of the hospital’s quality review committee. After Dr. Tunca performed surgery to remove an ovarian tumor in June 2006, a severe blood clot formed in the patient’s femoral artery. Dr. Painter performed a femoral-femoral bypass, correcting the condition. Id. at 1241. Dr. Painter allegedly told the hospital’s vice president and medical affairs director that Dr. Tunca had “inadvertently cut the [patient’s] left iliac artery,” and made similar statements to other doctors. Id. at 1241-42. Dr. Conway allegedly spoke to Dr. Tunca, in the presence of other doctors, “regarding his allegedly cutting the [patient’s] artery.” Id. at 1242.
Dr. Tunca filed suit against Drs. Painter and Conway in July 2007, alleging slander per se against both defendants. This is a claim that the statements in question are unambiguously defamatory. He claimed that their statements, made in the presence of others, were “false, malicious, slanderous, and…inten[ded] to injure plaintiff’s good name and credit in his profession.” Id. After several dismissals of his slander claims, the plaintiff filed a third amended petition alleging slander per quod against both defendants, adding allegations that the defendants’ statements had been “disseminated throughout the hospital,” affecting his ability to treat patients and his ability to get new patients. Id. at 1245. After the Cook County Circuit Court dismissed these claims, the plaintiff appealed.
An Illinois federal district court dismissed claims of defamation per se and defamation per quod brought as part of a lawsuit alleging employment discrimination, holding that the statements in question amounted to non-actionable opinion. Artunduaga v. University of Chicago Medical Center, at al, No. 12 C 8733, mem. op. (N.D. Ill., May 16, 2013). The motion before the court only sought dismissal of the defamation claims and a claim for intentional interference with employment. The court stated that the statements at issue, while not legally defamatory, could still support the plaintiff’s employment discrimination claims. The case identifies the elements necessary to support a defamation claim under Illinois state law.
The plaintiff began a residency at the University of Chicago Medical Center (UCMC) in June 2011, under the supervision of defendant Dr. David Song. She met with Dr. Song and others in November 2011 in order to discuss her “unsatisfactory performance.” Id. at 2. A memorandum summarizing the meeting was sent to multiple hospital employees. The plaintiff was later placed on probation, and she eventually learned that her one-year contract would not be renewed. Dr. Song sent her a letter on April 30, 2012 that reportedly summarized her employment status and gave her an assignment for the remainder of her residency, with copies to two hospital officials. At a grievance hearing regarding the plaintiff on May 16, 2012, Dr. Song read aloud an email from another doctor containing criticisms of the plaintiff. The plaintiff claimed that Dr. Song added his own “critical assessment[s]” of her performance. Id.
A television reenactment of a bombing, in which a man suffered severe injury and his friend lost his life, did not give rise to claims for false light invasion of privacy or defamation, according to an Illinois federal court. Butler v. Discovery Communications, LLC, No. 12 cv 6719, mem. op. (N.D. Ill., May 9, 2013). The court found that the reenactment’s portrayal of the plaintiff, while different from the plaintiff’s account of the incident, did not portray the plaintiff in an offensive or damaging fashion, nor did it harm the plaintiff’s reputation in a manner constituting defamation.
The defendant, Discovery Communications, broadcast an episode of its show “Wicked Attraction” on June 15 and July 7, 2012, about an incident involving the plaintiff, Alphonso Butler, that occurred on February 15, 2000. Butler was with his “best friend,” Marcus Toney, that night, when Toney received a package from his estranged wife. Id. at 1. According to Butler, Toney asked him to open the package, but then stepped between Butler and the package and opened it himself. The package contained a pipe bomb that exploded when Toney opened the box. The blast killed Toney and injured Butler. Toney’s wife and her boyfriend are in prison for his murder.
An appellate court in Illinois reversed a lower court ruling dismissing a defamation lawsuit brought by an associate professor at Northwestern University. Mauvais-Jarvis v. Wong, et al, Nos. 1-12-0070, 1-12-0237 cons., slip op. (Ill. App. 1st Dist., Mar. 28, 2013). The plaintiff claimed that the defendants committed libel against him in emails and other correspondence exchanged in the course of an internal investigation into data presented by the plaintiff for publication. The trial court dismissed all defamation claims, holding that the statements in question were subject to an absolute privilege because the defendants were investigating “suspected research misconduct.” Id. at 2. The appellate court accepted the plaintiff’s argument that the statements are only protected by a qualified privilege, and that the defendants had not established in their motion to dismiss that the privilege should apply.
The plaintiff, Franck Mauvais-Jarvis, is an associate professor of medicine at Northwestern University and the research director of the school’s Comprehensive Center on Obesity. Part of his research is funded by the U.S. Department of Health and Human Services (HHS). The court gives a comprehensive overview of HHS’ policies on “research misconduct,” which includes fabrication, falsification, or manipulation of data and research materials, as well as plagiarism. Id. at 4. Northwestern maintains an Office of Research Integrity (ORI) based on HHS regulations, which conducts reviews of alleged research misconduct.
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