In Doe v. Harris, Case No. 13-15263 (U.S. Court of Appeals, Ninth Circuit, order entered November 18, 2014), the U.S. Court of Appeals for the Ninth Circuit affirmed a district court’s order preliminarily enjoining provisions of the Californians Against Sexual Exploitation Act (“Act”). The Act seeks, inter alia, to update reporting obligations of registered sex offenders by requiring they provide a list of all Internet identifiers they have established and of all Internet service providers they use. The Ninth Circuit agreed with the district court that the Act imposes a substantial burden on offenders’ ability to engage in legitimate online speech, including anonymous speech, as protected by the First Amendment. It concluded that the Act unnecessarily chills protected speech by not making clear what offenders are required to report, providing insufficient safeguards to prevent the public release of reported information, and because the 24-hour reporting requirement is onerous and overbroad. The Ninth Circuit concluded that appellees were likely to succeed on the merits of their First Amendment challenge and that the district court did not abuse its discretion in finding that the elements for obtaining a preliminary injunction had been satisfied.
In Rosolowski et al. v. Guthy-Renker LLC, Case No. B250951 (Cal. Ct. App., 2nd Dist., Div. 3, order entered October 29, 2014), a California court of appeals held that a header in a commercial email does not misrepresent the sender’s identity simply because it fails to identify the name of the entity that sent it, or because it fails to identify an entity with a traceable domain name, as long as the sender’s identity is readily ascertainable from the email body. California Business & Professions Code section 17529.5 prohibits email ads with falsified, misrepresented, or forged header information, or that contain a subject line likely to mislead a recipient about a material fact regarding the contents or subject matter of the message. In this case, defendant’s emails were ads for its consumer brands and the emails provided a link to its Web site, an unsubscribe notice, and physical address. The bodies also clarified that the free gift mentioned in the “subject” line was contingent on a purchase, although the subject line did not refer to the purchase agreement.
On October 28, 2014, the Federal Trade Commission (“FTC”) filed a complaint against AT&T in the U.S. District Court for the Northern District of California, alleging it sold consumers unlimited smartphone data plans without telling them it would slow Internet speeds once consumers reached a certain amount of data in a particular billing cycle. The FTC alleges this practice of data “throttling” reduced Internet speeds by up to 90% in some instances. It also alleges that AT&T violated the FTC Act by changing the terms of consumers’ unlimited data plans during contract periods, and by failing to fully disclose the specifics of the practice of throttling to consumers renewing unlimited data plans. Finally, the FTC alleges that when customers cancelled contracts due to slowed Internet speeds, AT&T charged high early termination fees.
Summary Judgment Precluded by Dispute Over Alleged Material Misrepresentation in Unsolicited Commercial Email
In Wagner v. Digital Publishing Corporation et al., Case No. C 13-04952 (U.S. District Court, N.D. California, order entered October 10, 2014), the U.S. District Court for the Northern District of California held that a triable issue over whether the “From” lines, domain names, and subject lines of unsolicited commercial emails contained material misrepresentations defeats partial summary judgment on plaintiff’s state law claims. The court held there were genuine issues of material fact about whether the companies listed as the registrants of the domain names from which the emails were sent were valid entities when the emails were sent. It also held there was no evidence that the defendants used privately registered domain names to conceal their identities as part of the emails, and that a reasonable juror could find that the subject lines were too good to be true and thus unlikely to mislead a recipient.
In Boston et al. v. Athearn et al., Case No. A14A0971 (Ga. Ct. App., order entered October 10, 2014), the Georgia Court of Appeals reversed a trial court’s grant of summary judgment and ruled that a couple may be held liable for not requiring their minor child to cancel a fake Facebook account after they learned about it. Their child had created an account using a classmate’s name, which included an altered photo and sexual, racist, and otherwise offensive postings. He then invited his classmate’s teachers, family members, and other students to “friend” the account. The victim’s parents sued the child and child’s parents for libel and intentional infliction of emotional distress, claiming the parents breached a duty to supervise their child’s use of a computer and Internet account. The appellate court ruled that the parents may be held directly liable for their own negligence in failing to supervise or control their child in a matter involving conduct that posed an unreasonable risk of harm to others.
In Elliott et al. v. Google Inc., Case No. CV-12-1072 (U.S. District Court, D. Arizona, order entered September 10, 2014), the U.S. District Court for the District of Arizona held that the primary significance of the term “Google” to a majority of the Internet-searching public was to refer to the Google search engine specifically, rather than as a descriptive term for search engines generally. This was so even if “google” is widely used as a generic verb, regardless of whether Google’s search engine is being used. The court opined that “a trademark performs its statutory function so long as it distinguishes a product or service from those of others and indicates the product’s or service’s source.” The court concluded that plaintiff had failed to present conclusive evidence that the primary meaning of “google” was as a generic verb rather than as an indicator of the origin of the services at issue.
On September 9, 2014, California Governor Jerry Brown signed Assembly Bill 2365, which prevents consumer contracts for goods and services from containing provisions that require consumers to waive their rights to make disparaging comments about those goods or services. It also forbids threatening or penalizing consumers for making disparaging comments. The law takes effect on January 1, 2015, and will be enforceable by consumers and public prosecutors.
In Levitt v. Yelp! Inc., Case No. 11-17676 (U.S. Court of Appeals, Ninth Circuit, order entered September 2, 2014), the U.S. Court of Appeals for the Ninth Circuit affirmed the district court’s dismissal of a class action lawsuit filed by business owners who alleged Yelp Inc. had extorted or attempted to extort payments for advertising by altering user reviews and writing false and defamatory reviews in violation of California’s Unfair Competition Law (“UCL”). In a ruling that arguably suggests that Yelp can manipulate its ratings for money, the court held that the business owners failed to state a claim for extortion for purposes of the UCL. It also held that the business owners failed to allege sufficient facts to support their claim that Yelp wrote disparaging reviews of their businesses.
On August 15, 2014, the Federal Communications Commission (“FCC”) extended the deadline for the second round of public comments on its proposed new “net neutrality” rules by three business days to September 15, 2014. The extension comes in response to the overwhelming one million plus comments received by the FCC on the proposed new rules, and mirrors a similar three day extension to the initial commentary period in July of 2014. FCC Chairman Tom Wheeler outlined his proposed new net neutrality rules in April of 2014, but met with fierce opposition from critics who argued the rules would let content companies like Netflix pay Internet Service Providers for faster delivery to their customers, thereby slowing speeds for users of other sites. The FCC intends to review all comments and establish new net neutrality rules by the end of 2014.
In Federal Trade Commission v. Amazon.com, Inc., Case No: 2:14-cv-01038 (U.S. District Court, W.D. Washington, complaint filed July 10, 2014), the Federal Trade Commission sued Amazon.com for allegedly permitting children to collectively incur millions of dollars in purchases on their parents’ credit cards without their parents’ knowledge or consent while playing mobile apps. The lawsuit seeks a court order requiring Amazon.com to refund unauthorized charges. It also seeks to prevent the company from billing account holders for in-app charges made without their consent.