CDA Immunity Against Right of Publicity Claims Upheld

Interactive service providers can breathe a little easier now since the California Supreme Court has decided not to disturb an August 9, 2017 decision by the California Court of Appeals applying Communications Decency Act (“CDA”) Section 230 protections for interactive service providers to right of publicity claims.  A California Superior Court judge’s decision not to dismiss a right of privacy claim threatened to create another vulnerability in CDA Section 230 protections for website hosts.  While the Superior Court judge properly applied Section 230 to many of these claims, the judge’s decision that Section 230 does not apply to right of publicity claims could have opened the door to further lawsuits seeking to stifle online criticism.  Fortunately, the California Court of Appeals’ decision to reverse the Superior Court remains the law in California.

Cross v. Facebook should have been a simple CDA Section 230 defense win for Facebook against a musician attempting to silence critics.  Jason Cross, a musician that performs under the alias of “Mikel Knight”, has been subjected to criticism for alleged mistreatment of his sales team.  Cross filed a lawsuit in Tennessee against both the critics and Facebook.  Cross also sued Facebook in California seeking removal of critical Facebook pages and identification of those responsible for the Facebook pages.  Ordinarily, such attempts to attack a social network for a user’s exercise of their free speech rights would be prevented by the Communications Decency Act, Section 230.  CDA Section 230 shields interactive service providers (“ISP”) from liability based on user-generated content when the ISP acts as a passive conduit for people to post their ideas.  Section 230 is considered crucial for online free speech, as requiring website hosts to review and censor all user content would limit the ability to provide open forums for users and would have chilling effects on user speech.

Cross’ complaint against Facebook regarding the negative user content was only remarkable for the result.  The Superior Court rejected Cross’s other charges against Facebook for breach of contract, negligent misrepresentation, negligent interference with economic advantage, and promissory estoppel.  The surprise came when the Superior Court determined Cross could prevail in his claims that Facebook made commercial use of Cross’s name and likeness by placing advertisements on a web page hosting critical content.  The Superior Court stated that a person’s publicity rights are intellectual property under state law, and intellectual property infringement claims are not protected by the CDA.  The trial court’s holding indicated that any speech on social media that was about a real person and that was published on a website containing advertising could be subject to a right of publicity claim.  In so deciding, the Superior Court failed to follow well-established First Amendment limits to the right of publicity and the immunities granted by the CDA.

The Appeals Court rejected these assertions, also noting Cross’s publicity right complaints did not apply to Facebook since the web page advertisements did not use Cross’s name or likeness, and Facebook neither created nor was promoted by any of the posted advertisements.  While the Appeals Court did not address Facebook’s First Amendment claims, it did require Cross’s complaint be dismissed and required Cross to pay Facebook’s attorney fees for defending of the lawsuit under California’s anti-SLAPP laws.  These laws were created to discourage “strategic lawsuits against public participation” where a meritless lawsuit is filed to stifle speech regarding an issue of public interest.  While 2017 has seen a number of cases eroding the protections provided by Section 230 of the Communications Decency Act, Cross v. Facebook ensures that a mere right of publicity complaint will not be enough to strip an ISP of its protections.

Read more here»

Be Sociable, Share!
    Comments { 0 }

    NEW REQUIREMENTS FOR CALIFORNIA CONTINUITY OR “NEGATIVE OPTION” PROGRAMS

    On September 28, 2017, SB-313 was approved by Governor Jerry Brown effective July 1, 2018.  This most recent update to the law that governs how businesses may provide automatic renewal services to customers in the state comes in response to complaints regarding continuity programs under existing law.

    Businesses that offer subscription-based services including through a website to California consumers must comply with Cal. Bus. & Prof. Code sections 17600-17606 by making certain disclosures regarding automatic renewal terms.  There are also federal laws applicable to subscription services, such as the Federal Trade Commission Act (15 U.S.C. § 41) which requires clear and honest disclosures regarding the company’s automatic renewal policies.  The Federal Trade Commission and state Attorneys General may also prosecute companies under 15 U.S.C. sections 8401-8405 for failure to comply with regulations applying to post-transaction charges and negative option features that include subscription services.

    California’s new law requires a separate, stand-alone form for the consumer to review and approve to authorize subscription services through a third-party account such as a credit or debit card. The customer acknowledgment should include the terms of the automatic renewal agreement, the cancellation policy and how the consumer can cancel the service in a format the consumer can retain.  Businesses offering free trials must include a statement of how to cancel the services and allow the consumer to cancel the service before the consumer is charged for the good or service.  The statute also requires timely, simple and cost-effective cancellation mechanisms, such as toll-free phone numbers, mailing addresses and email addresses.  If there is to be a material change in the terms of the automated service, the business will need to provide the consumer clear and conspicuous notice of the change along with retainable cancellation instructions.

    Read more here»

    Be Sociable, Share!
      Comments { 0 }

      INCLUSION IN TEXT MESSAGE OF LINK TO MOBILE APP PREVENTS DISMISSAL OF PUTATIVE TELEPHONE CONSUMER PROTECTION ACT LAWSUIT

      On October 11, 2017 the U.S. District Court for the Northern District of California, San Jose District, denied a motion to dismiss a putative Telephone Consumer Protection Act (the “TCPA”) class action based on a text message confirming plaintiff’s registration for defendant’s rewards program.  At issue was the effect of having included a link to defendant Häagen-Dazs’ mobile app.  Subject to limited exceptions, 47 C.F.R. §64.1200(a)(2) (2013) requires “prior express written consent” whenever a text or call to a cellular phone using an automatic telephone dialing system introduces an advertisement or constitutes telemarketing.

      The TCPA regulations define “advertisement” as “any material advertising the commercial availability or quality of any product, goods, or services” and “telemarketing” as “the initiation of a . . . message for the purpose of encouraging the purchase or rental of, or investment in, property, goods or services . . . .”

      San Pedro-Salcedo v. Haagen-Dazs Shoppe Co., 2017 U.S. Dist. LEXIS 168532, *5 (quoting 47 C.F.R. §64.1200(f)(1) and (12)).  Distinguishing cases in which further action was required to complete registration, the court held:

      If the registration for Häagen-Dazs Rewards was completed before the receipt of the text and without the need to download Defendants’ app, then Defendants’ message to “Download our app here,” arguably constitutes an advertisement for the commercial availability of Defendants’ app. Construing the alleged facts in the light most favorable to Plaintiff, the Court finds Plaintiff’s allegations sufficient at the pleading stage.

      Id. at *6-7.  A link to the opinion may be found here.

      Be Sociable, Share!
        Comments { 0 }

        COURT ENJOINS LINKEDIN FROM BLOCKING SCRAPER

        Plaintiff hiQ Labs’ business model involves providing information to businesses about their workforces based on statistical analysis of publicly available information on profiles of LinkedIn users. After several years of tolerating hiQ’s access and use of its data, defendant LinkedIn issued a cease and desist letter and attempted to block hiQ’s ability to access the profile information. In response, hiQ initiated a declaratory relief action alleging that LinkedIn’s actions constitute unfair business practices under Cal. Bus. & Prof. Code § 17200 et seq., and asserting common law tort and contract claims.  The plaintiff also moved for a preliminary injunction allowing it to access LinkedIn profiles pending resolution of the dispute.  On August 14, 2017, the Northern District of California granted the requested injunction, holding that:

        The balance of hardships tips sharply in hiQ’s favor. hiQ has demonstrated there are serious questions on the merits. In particular, the Court is doubtful that the Computer Fraud and Abuse Act may be invoked by LinkedIn to punish hiQ for accessing publicly available data; the broad interpretation of the CFAA advocated by LinkedIn, if adopted, could profoundly impact open access to the Internet, a result that Congress could not have intended when it enacted the CFAA over three decades ago. Furthermore, hiQ has raised serious questions as to whether LinkedIn, in blocking hiQ’s access to public data, possibly as a means of limiting competition, violates state law.

        A link to the opinion may be found here:

        hiQ Labs Inc. v. LinkedIn Corporation (Case No. 17-cv-03301-EMC), Order Granting Preliminary Injunction

        Be Sociable, Share!
          Comments { 0 }

          CANADA SUPREME COURT REJECTS FACEBOOK’S CALIFORNIA FORUM SELECTION CLAUSE

          The forum selection clause in Facebook’s terms of use specifies that disputes with Facebook users must be resolved in California according to California law. By order issued today, the Supreme Court of Canada finds Facebook’s forum selection clause to be unenforceable:

          https://scc-csc.lexum.com/scc-csc/scc-csc/en/item/16700/index.do

          Be Sociable, Share!
            Comments { 0 }

            CONGRESS ENACTS CONSUMER REVIEW FAIRNESS ACT OF 2016

            On Wednesday, December 14, 2016, President Obama signed the Consumer Review Fairness Act of 2016 (the “Act”) into law.  The Act makes void certain clauses of a form contract that prohibit or restrict an individual from engaging in a review of a seller’s goods, services, or conduct.  The Act follows California’s enactment of Assembly Bill 2365 in September 2014 (codified at Civil Code section 1670.8) which similarly bars consumer contract provisions that purport to waive consumers’ right to make disparaging comments about goods or services.

            Subject to enumerated exceptions, the Act makes a provision of a form contract void from the inception if it: (1) prohibits or restricts an individual who is a party to such a contract from engaging in written, oral, or pictorial reviews, or other similar performance assessments or analyses of, including by electronic means, the goods, services, or conduct of a person that is also a party to the contract; (2) imposes penalties or fees against individuals who engage in such communications; or (3) transfers or requires the individual to transfer intellectual property rights in review or feedback content (with the exception of a nonexclusive license to use the content) in any otherwise lawful communications about such person or the goods or services provided by such person.

            A “form contract” is a contract with standardized terms: (1) used by a person in the course of selling or leasing the person’s goods or services, and (2) imposed on an individual without a meaningful opportunity to negotiate the standardized terms. The definition excludes an employer-employee or independent contractor contract.

            Enforcement authority is provided to the Federal Trade Commission (FTC) and states, and the Act requires the FTC to provide businesses with nonbinding best practices for compliance.

            A link to the legislation may be found here.

            Be Sociable, Share!
              Comments { 0 }

              CONGRESS ENACTS BETTER ONLINE TICKET SALES (BOTS) ACT OF 2016

              On Wednesday, December 14, 2016, President Obama signed the “Better Online Ticket Sales Act of 2016” (the “BOTS Act” or the “Act”) into law. The Act prohibits the circumvention of a security measure, access control system, or other technological measure on an Internet website or online service of a ticket issuer that is used to enforce posted event ticket purchasing limits or to maintain the integrity of posted online ticket purchasing order rules for a public event with an attendance capacity exceeding 200 persons. The Act also prohibits the sale of or offers to sell an event ticket in interstate commerce obtained through such a circumvention violation if the seller participated in, had the ability to control, or should have known about the violation.

              It shall not be unlawful under the BOTS Act to create or use software or systems to: (1) investigate, or further the enforcement or defense of, alleged violations; or (2) identify and analyze flaws and vulnerabilities of security measures to advance the state of knowledge in the field of computer system security or to assist in the development of computer security products.

              Violations shall be treated as unfair or deceptive acts or practices under the Federal Trade Commission Act. The Act provides authority to the Federal Trade Commission and states to enforce against such violations.

              A link to the legislation may be found here.

              Be Sociable, Share!
                Comments { 0 }

                DMCA AGENTS TO BE RE-REGISTERED WITH U.S. COPYRIGHT OFFICE BY DECEMBER 31, 2017

                On or before December 31, 2017, online service providers that have previously registered DMCA designated agents with the U.S. Copyright Office must re-register through its new online registration system. Otherwise, the online service provider will not be eligible for the safe harbor protections of the Digital Millennium Copyright Act (the “DMCA”). The notification of this new regulation can be found here.

                The safe harbor provisions of the DMCA provide a shield against copyright infringement liability based upon content posted by internet users. Without the safe harbor protections, an online service provider can be exposed to copyright infringement without its knowledge when the content underlying the infringement is posted by an internet user. Online service providers include, for example, website hosting, blogs, email services, chat rooms or other venues in which user-generated content may be posted online.

                This shield requires that the online service provider comply with all of the requirements of the DMCA, which beginning December 1, 2016 will include the online registration of a designated agent for the online service provider.  The new registration system is accessible at https://dmca.copyright.gov/osp/login.html.

                Designated agent registrations must be renewed every three years.

                Be Sociable, Share!
                  Comments { 0 }

                  CALIFORNIA DISTRICT COURT FINDS NEW JERSEY TCCWNA CLAIMS LACK ARTICLE III STANDING

                  The New Jersey Truth-in-Consumer Contract, Warranty and Notice Act (“TCCWNA”), enacted nearly 35 years ago, has over the past 7 years become increasingly popular with class action attorneys.  Cases generally target retailers’ online terms and conditions that include provisions that purport to limit rights or remedies under other state or Federal laws.  The TCCWNA prohibits a:

                  seller, lessor, creditor, lender or bailee…in the course of his business offer to any consumer or prospective consumer or enter into any written consumer contract or give or display any written consumer warranty, notice or sign…which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller, lessor, creditor, lender or bailee as established by State or Federal law at the time the offer is made or the consumer contract is signed or the warranty, notice or sign is given or displayed.

                  N.J.S.A. § 56:12-15.

                  Several recent federal district court decisions question whether plaintiffs have suffered harm sufficient to satisfy Article III standing requirements articulated by the Supreme Court in Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548 (2016).  In Candelario v. Rip Curl, Inc., 2016 U.S. Dist. LEXIS 163019 (C.D. Cal. Sept. 7, 2016), the court dismissed plaintiff’s complaint alleging that defendant Rip Curl’s online terms and conditions contained impermissible limitations on defendant’s liability.  The court found that plaintiff had not pled any injury-in-fact by virtue of having read the terms after being disappointed by an item of clothing she purchased from defendant’s website.

                  A link to the opinion may be found here.

                  Be Sociable, Share!
                    Comments { 0 }

                    CLASS ACTION ADVISORY: NEW JERSEY TRUTH-IN-CONSUMER CONTRACT WARRANTY AND NOTICE ACT

                    Beginning in early 2016, courts throughout the country have seen a trend of class action lawsuits brought under the New Jersey Truth-In-Consumer Contract Warranty and Notice Act (the “TCCWNA”).  Liability under the TCCWNA is premised upon entering into, giving or displaying a contract, warranty, notice or sign “which includes any provision that violates any clearly established legal right of a consumer or responsibility of a seller, lessor, creditor, lender or bailee as established by State or Federal law.”  In addition to prohibiting invalid and unenforceable provisions, the statute bars the use of catch-all invalidity provisions, which state generally that some provisions of the contract, notice, or sign may be void, inapplicable, or unenforceable.  Considering the broad statutory language, many agreements commonly used by covered entities are rendered unlawful by this statute.  It is advisable for such entities to have their website(s), consumer agreements and website terms of use reviewed for TCCWNA compliance, and in the meantime consider screening New Jersey consumers from all marketing, sales, loans or collections.

                    Be Sociable, Share!
                      Comments { 0 }