On June 27, 2016 in Silverstein v. Keynetics et al., Case No. 16-cv-00684-DMR, the Northern District of California dismissed a putative class action lawsuit asserting claims under California’s anti-spam statute, Bus. & Prof. Code § 17529.5. The motion, brought by The Internet Law Group on behalf of its clients, asserted that all of the claims in the action were preempted by the federal CAN-SPAM Act of 2003. This includes a claim under subsection (a)(1) of the statute, which purports to impose liability where “[t]he e-mail advertisement contains or is accompanied by a third-party’s domain name without the permission of the third party” (referring to the use of the linkedin.com domain name). The court agreed and allowed fourteen days leave to amend, but noted that it “has serious doubts about Plaintiff’s ability to plead his claims to escape federal preemption.” CAN-SPAM preemption of subsection (a)(1) is an issue of first impression across state appellate and federal courts.
The court’s opinion may be found at the following link: 52 – Order on Motion to Dismiss
Long, supra, at 13. The court goes on to quote the following “bright line rule for determining the validity of browsewrap agreements” as announced in Nguyen:
Id. at 17 (quoting Nguyen, supra, at pp. 1178-1179.) “Typically that ‘something more’ had taken the form of an explicit textual notice warning users to ‘Review terms’ or admonishing users that by clicking a button to complete the transaction ‘you agree to the terms and conditions in the [agreement].’” Id. at 16-17. In this case no such explicit textual notice was provided.
The court’s opinion may be found at the following link:
CALIFORNIA DISTRICT COURT RULES THAT 47 U.S.C. § 230(c)(1) BARS DISCRIMINATION LAWSUIT BASED ON REMOVAL OF SOCIAL MEDIA CONTENT
On November 13, 2015, the United States District Court for the Northern District of California dismissed a lawsuit by Sikhs for Justice Inc. (“SFJ”) asserting several causes of action against Facebook, Inc., including a federal claim of racial discrimination, for having allegedly blocked SFJ’s Facebook page in India without notice or explanation. Sikhs for Justice “SFJ”, Inc. v. Facebook, Inc., 2015 U.S. Dist. LEXIS 154716 (N.D. Cal. Nov. 13, 2015). According to SFJ, Facebook acted “on its own or on the behest of the Government of India” because of discrimination against SFJ and its members on the grounds of race, religion, ancestry, and national origin.
The court denied the claim pursuant to 47 U.S.C. 230, the federal Communications Decency Act. Its subsection (c)(1) states in pertinent part that “[n]o provider or user of an interactive computer service [“ICS”] shall be treated as the publisher or speaker of any information provided by another information content provider.” The court relied upon Ninth Circuit precedent for the proposition that subsection (c)(1) immunizes ICS removal of user content.
Notably, the court did not reference 47 U.S.C. 230, subsection (c)(2), which provides that “[n]o provider or user of an interactive computer service shall be held liable on account of– (A) any action voluntarily taken in good faith to restrict access to or availability of material…” By relying upon subsection (c)(1), which does not require a finding of good faith, the court granted Facebook’s FRCP 12(b)(6) motion.
On October 6, 2015, the European Union’s highest court (the “ECJ”) issued an order (the “Order”) invalidating the 15-year-old U.S.-EU Safe Harbor Program (the “Program”). Schrems v. Data Prot. Comm’r, E.C.J., No. C-362/14. The Program allowed U.S. companies to transfer EU citizens’ data to the U.S. by self-certifying to the U.S. Department of Commerce privacy principles similar to those contained in the EU Data Protection Directive (95/46/EC). The basis for the Order was that the Program didn’t safeguard personal data against surveillance by the U.S. government and didn’t allow sufficient redress to EU citizens whose privacy had been breached by such surveillance. The case was initiated by Austrian law student Max Schrems against Facebook in Ireland where Facebook’s European operations are headquartered. The case was referred to the ECJ by Ireland’s High Court after the Irish Office of the Data Protection Commissioner said it didn’t need to examine the complaint about data transfers made by Facebook Ireland Inc. because the transfers were done in accordance with the Program. The ECJ found that U.S. authorities could ignore the privacy protections of the Program and could “access the personal data transferred from the member states to the United States and process it in a way incompatible, in particular, with the purposes for which it was transferred, beyond what was strictly necessary and proportionate to the protection of national security.” The European Commission has stated publicly that any transfer of data from European Economic Area in the last 15 years that relied on the Safe Harbor Program may be subject to legal challenge. While approximately 4,400 U.S. companies are certified under the Program, the Order would not prevent the continued transfer of data by those with alternative means for data transfers in place, such as binding corporate rules or model contracts.
NINTH CIRCUIT HOLDS NETFLIX’S VIEWING HISTORY DISCLOSURES ON SUBSCRIBERS’ TELEVISIONS DO NOT VIOLATE VIDEO PRIVACY PROTECTION ACT
On July 31, 2015, in Mollett v. Netflix, Inc., No. 12-17045, the Court of Appeals for the Ninth Circuit affirmed the order of the United States District Court for the Northern District of California dismissing claims brought under the Video Privacy Protection Act (“VPPA”), 18 U.S.C. § 2710, and California Civil Code § 1799.3 by two plaintiffs on behalf of themselves and other similarly-situated Netflix subscribers. Plaintiffs allege that Netflix violated the statutes by permitting certain disclosures about their viewing history to third-parties, namely, subscribers’ family, friends and guests. The claims were directed at Netflix’s display of a subscriber’s video queue and “recently watched” video titles on a subscriber’s television when Netflix is activated. Netflix brought a motion to dismiss for failure to state a claim on the grounds that, inter alia, disclosures of personal information are made to subscribers themselves and therefore permissible. The Ninth Circuit stated that:
“The interpretation of this section of the VPPA is an issue of first impression for this Circuit. The VPPA was enacted in 1988 in response to the Washington City Paper’s publication of then-Supreme Court nominee Robert Bork’s video rental history. [citation omitted] The paper had obtained (without Judge Bork’s knowledge or consent) a list of the 146 films that the Bork family had rented from a Washington, D.C.-area video store. Id. Members of the Judiciary Committee “denounced the disclosure” and Congress acted swiftly to enact the VPPA . . . ‘[t]o preserve personal privacy with respect to the rental, purchase or delivery of video tapes or similar audio visual materials.’ Id. at *7.”
The Ninth Circuit dismissed plaintiffs’ claims. “The VPPA prohibits a ‘video tape service provider’ from knowingly disclosing ‘personally identifiable information’ about one of its consumers ‘to any person,’ and provides for liquidated damages in the amount of $2,500 for violation of its provisions.’ . . . The Act provides several exceptions to the disclosure prohibition, [including] allowing disclosure of a consumer’s video rental history to the consumer himself. . .” Id. at *8. The Ninth Circuit held that the disclosure alleged by the plaintiffs is a disclosure “to the consumer” that is permitted by the Act. Id. at *9:
“The fact that a subscriber may permit third parties to access her account, thereby allowing third parties to view Netflix’s disclosures, does not alter the legal status of those disclosures. No matter the particular circumstances at a subscriber’s residence, Netflix’s actions remain the same; it transmits information automatically to the device that a subscriber connected to her Netflix account. The lawfulness of this disclosure cannot depend on circumstances outside of Netflix’s control.”
Id. at *12. The Ninth Circuit applied the same analysis to dismiss the claims under California’s video privacy statute, Civil Code § 1799.3.
The Ninth Circuit’s opinion may be found at the following link: http://cdn.ca9.uscourts.gov/datastore/opinions/2015/06/15/13-55666.pdf
California Court of Appeals Holds Personal Identification Information Protections Under Song-Beverly Credit Card Act Inapplicable to Online Purchase Where Buyer Elects to Pick Up Goods at Seller’s Store
The California Court of Appeals recently held in Ambers v. Beverages & More, Inc. (“BevMo”), Case No. B257487 (Cal. Ct. App., 2nd Dist., order entered May 4, 2015), that Civil Code section 1747.08 of the Song-Beverly Credit Card Act did not apply to an online purchase where the buyer elected to pick up the merchandise at the seller’s store. The court affirmed the lower court’s judgment in favor of defendant BevMo. This decision is in the wake of the California Supreme Court’s decision in Apple v. Superior Court (Krescent), 56 Cal. 4th. 128 (2013), in which the court held that the Song-Beverly Credit Card Act was inapplicable to an online transaction involving a downloadable product.
Section 1747.08, subdivision (a) provides:
Except as provided in subdivision (c), no person, firm, partnership, association, or corporation that accepts credit cards for the transaction of business shall do any of the following:
- Request, or require as a condition to accepting the credit card as payment in full or in part for goods or services, the cardholder to write any personal identification information upon the credit card transaction form or otherwise.
- Request, or require as a condition to accepting the credit card as payment in full or in part for goods or services, the cardholder to provide personal identification information, which the person, firm, partnership, association, or corporation accepting the credit card writes, causes to be written, or otherwise records upon the credit card transaction form or otherwise.
- Utilize, in any credit card transaction, a credit card form which contains preprinted spaces specifically designated for filling in any personal identification information of the cardholder.
“Personal identification information” is defined in section 1747.08, subdivision (b), as “information concerning the cardholder, other than information set forth on the credit card, and including, but not limited to, the cardholder’s address and telephone number.”
Section 1747.08, subdivision (c), sets forth certain exceptions to the statutory prohibitions. Subdivision (c)(4) allows personal identification information (“PII”) to be collected if it “is required for a special purpose incidental but related to the individual credit card transaction, including, but not limited to, information relating to shipping, delivery, servicing, or installation of the purchased merchandise, or for special orders.”
Plaintiff Ambers alleged he was required to provide PII to complete his online purchase, in violation of Song-Beverly.
The appellate court referenced Apple, supra, in which the court found the statute inapplicable to an online transaction because the collection of PII by online retailers could serve a legitimate purpose such as fraud prevention. Brick-and-mortar retailers, by contrast, could verify identity at the time of purchase without requiring the collection of PII. For example, they could compare the signature on the credit card transaction form with the signature on the back of the card.
Here, the appellate court found the reasoning in Apple applicable to an online credit card transaction where the merchandise is picked up at the store, because ownership of the merchandise passes immediately upon completion of the online purchase, and not when it is picked up at the store. Without obtaining Ambers’ PII, BevMo would have had no means of verifying that Ambers was an authorized user of the credit card number entered on BevMo’s website before the purchase transaction was completed.
Finally, the court rejected Ambers’ argument that presentation at pickup of his identification and the credit card he had used to complete the online purchase was sufficient antifraud protection for BevMo. The court reasoned that such presentation alone would not provide sufficient recourse if the transaction later proved to be fraudulent.
Under existing California Penal Code Section 528.5, a person who knowingly and without consent credibly impersonates another person via the Internet or other electronic means in order to harm, intimidate, threaten, or defraud a third person is guilty of a public offense punishable by a fine not exceeding one-thousand dollars, or by imprisonment in a county jail not exceeding one year, or both. Section 528.5 includes a private right of action.
California Assembly Bill 695 would add Section 1708.87 to the California Civil Code, creating a new private right of action against a person who knowingly and without consent credibly impersonates another person via the Internet or by other electronic means.
The proposed legislation:
- would provide standing to the impersonated person, any person whose likeness is used and any person induced to believe that the defendant is the person being impersonated, provided the plaintiff suffers general or special damages as described in Civil Code Section 48a,
- omits the specific intent requirement of Penal Code Section 528.5 and its application of the compensatory damages and equitable relief provisions of California’s Comprehensive Computer Data Access and Fraud Act (Penal Code Section 502), and
- would authorize courts to award reasonable attorneys’ fees and court costs to a prevailing plaintiff, in contrast with Penal Code Section 528.5 in which attorney fees are available in any civil action by reference to Section 502, paragraph (2) of subdivision (b).
As with Penal Code Section 528.5, under proposed Section 1708.87:
- An impersonation is considered “credible” if another person would reasonably believe, or did reasonably believe, that the defendant was or is the impersonated person, and
- “Electronic means” includes opening an email account or creating an account or profile on a social network using another person’s name.
The text of the proposed legislation may be found here.
Kavon Adli, founder and managing attorney of The Internet Law Group, was quoted in the April 29, 2015 International Business Times article entitled “Pirate Floyd Mayweather, Manny Pacquiao Streams Expected To Cause Big Headache For HBO, Showtime.”
The article is available at the following link:
On March 18, 2015, the Court of Appeals of the Second Circuit held that the Communications Decency Act of 1996 shields defendant GoDaddy.com, LLC from defamation liability based upon allegations that false statements about the plaintiffs in a Union newsletter were published on a website hosted on GoDaddy’s servers. The Court affirmed the judgment of the United States District Court for the Southern District of New York in favor of GoDaddy on its Federal Rule 12(b)(6) motion to dismiss, which also dismissed labor law claims against the Teamsters Union Local 456. In pertinent part, the Court held:
Accepting as true all of the allegations in the complaint, GoDaddy is immune from the Riccis’ defamation claims under a provision of the Communications Decency Act of 1996: “[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.” 47 U.S.C. § 230(c)(1). Preemption is express: “No cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section.”
Ricci v. Teamsters Union Local 456, 2015 WL 1214476, at *5.
The Court noted that it has “never construed the immunity provisions of the Communications Decency Act, but other courts have applied the statute to a growing list of internet-based service providers” including GoDaddy. Id. at *7 (citing, e.g., Klayman v. Zuckerberg, 753 F.3d 1354 (D.C. Cir. 2014); Doe v. MySpace, Inc., 528 F.3d 413 (5th Cir. 2008); Chi. Lawyers’ Comm. for Civil Rights Under Law, Inc. v. Craigslist, Inc., 519 F.3d 666, 672 (7th Cir. 2008)). Specifically, the Court held:
“None of this means, of course, that the original culpable party who posts defamatory messages would escape accountability. . . . Congress made a policy choice, however, not to deter harmful online speech through the separate route of imposing tort liability on companies that serve as intermediaries for other parties’ potentially injurious messages.” … In short, a plaintiff defamed on the internet can sue the original speaker, but typically “cannot sue the messenger.”
Id. at *6-7 (quoting Zeran v. Am. Online, Inc., 129 F.3d 327, 330-31 (4th Cir. 1997) and Craigslist 519 F.3d at 672).