Let’s [Not] Go Crazy: Copyright Holders Should Pause Before Sending Takedown Notices

It is common for copyright holders to send Digital Millennium Copyright Act (“DMCA”) takedown notices to websites to remove material that they believe to be infringing. But few are aware that overly aggressive policing can expose them to liability (including attorneys’ fees). Universal Music, while attempting to protect the copyright in Prince’s Let’s Go Crazy, found this out in a recent opinion from the United States Court of Appeals for the Ninth Circuit in Lenz v. Universal Music Corp.

Stephanie Lenz, a mother of two, posted a 29-second video on YouTube that showed her two children running, dancing and yelling while Prince’s Let’s Go Crazy played in the background. During the video she asked her 13-month old son if he liked the music and he started bobbing up and down while holding a push toy.

Universal, which was responsible for enforcing Prince’s copyrights, had an assistant in its legal department monitor YouTube for infringement. He would search YouTube for Prince’s songs and then review responsive videos to see if they “embodied a Prince composition” through “significant use of …the composition, specifically if the song was recognizable, was in a significant portion of the video or was the focus of the video.” The Ninth Circuit noted that none of Universal’s guidelines specifically considered the fair use doctrine before determining that Lenz’s video should be included in a takedown notice sent to YouTube. After Lenz’s video was removed, however, she not only reinstated it through a DMCA counter-notification but also sued Universal for violation of 17 U.S.C. §512(f), which prohibits making a knowing misrepresentation in a DMCA takedown notice that material is infringing.

Although the district court denied summary judgment to both parties, it certified its ruling for appeal. Universal first claimed that fair use is merely an affirmative defense that excuses infringement so it did not misrepresent the infringing nature of Lenz’s video, regardless of whether Lenz chose to assert her defense. The Ninth Circuit disagreed and held that material protected by the fair use doctrine is “authorized by law,” and unambiguously “not infringing” under the relevant statute.

Falling back to the next ditch, Universal contended that it had not knowingly misrepresented its good faith belief that the video was infringing because its procedures were sufficient to take fair use into account. Lenz countered that Universal could not have formed such a belief because it never considered fair use. The Ninth Circuit found that this presented a jury question and delineated what the jury should consider in evaluating Universal’s conduct:

[I]f a copyright holder ignores or neglects our unequivocal holding that it must consider fair use before sending a takedown notification, it is liable for damages under §512(f). If, however, a copyright holder forms a subjective good faith belief the allegedly infringing material does not constitute fair use, we are in no position to dispute the copyright holder’s belief even if we would have reached the opposite conclusion. A copyright holder who pays lip service to the consideration of fair use by claiming it formed a good faith belief when there is evidence to the contrary is still subject to §512 liability.

The Ninth Circuit suggested that the copyright holder’s determination need not be “searching or intensive” and proposed that, given the amount of digital material available, a properly set up computer algorithm might suffice for evaluating the vast majority of content while humans could review the “minimal remaining content.”

It remains to be seen what automatic processes and human determinations will pass muster in the Ninth Circuit but, in the meantime, copyright holders should not go crazy with takedown notices.

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Creepy Stalker a/k/a “The Watcher” Turns Dream Home into Nightmare – Pitfalls of Purchasing a “Stigmatized” Home

In 2014, a New Jersey couple with three children purchased a $1.3 million “dream home” located in a New York City bedroom community.  However, their dreams were dashed when they received the first of three supremely creepy letters just three days after closing.  In the letters, an individual who calls himself “The Watcher” told the family that the property “has been the subject of my family for decades” and that he has been “put in charge of watching and waiting for its second coming.”  He stated “I am pleased to know your names now and the name of the young blood you have brought to me” and inquired “Who has bedrooms facing the street?  I’ll know as soon as you move in,” further asserting that “all of the windows and doors . . . allow me to watch you and track you as you move through the house.”

Understandably disturbed and worried about their safety, the family never moved into the home and claim they cannot resell it once prospective buyers learn of “the Watcher’s” correspondence.  Frustrated, the family filed suit against the Sellers, Chicago Title Insurance Company, and A Absolute Escrow Settlement Company, alleging fraud and breach of contract for failure to disclose that the Sellers received a letter from “The Watcher” just over a week before the closing.

According to the National Association of Realtors, a “stigmatized” property is one that has been “psychologically impacted by an event, which occurred or was suspected to have occurred on the property, such event being one that has no physical impact of any kind.”  Stigmatizing events include the death of an occupant, the occurrence of a major crime such as murder, a serious illness such as AIDs, or a belief that the house is haunted.

Although real property law has long been governed by the doctrine of caveat emptor or “let the buyer beware,” many states (including Illinois) now require sellers to make certain disclosures regarding material defects in a property.  Fewer states consider purely psychological conditions to be a material defect requiring disclosure, and fewer still specifically require disclosure of psychological factors that only affect a person’s perception of a home.  Even the handful of states that require disclosure for deaths occurring on a property limit disclosures to deaths occurring within a few years of the sale date.

With limited legal recourse, a buyer wishing to avoid purchasing a stigmatized property must ask questions and thoroughly investigate a property prior to closing.  Even though a Seller may not be required to volunteer information about stigmatizing factors, the common law duty of good faith and fair dealing may preclude them from lying when asked a direct question.  If the Seller or their agent is not forthcoming, a buyer can ask the neighbors, perform an internet search, request police records, and check city records.  Although the odds of inadvertently purchasing a stigmatized home may be low, creepy situations like the case in Westfield, New Jersey demonstrate that it can pay to ask before closing.

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Unmasking Fuboy

In Hadley v. Subscriber Doe a/k/a Fuboy, the Illinois Supreme Court weighed in on defamation claims arising from anonymous internet posts.

In Hadley, an anonymous poster using the screen name “Fuboy” commented on an on-line article discussing Bill Hadley’s campaign for the Stephenson County Board.  Fuboy commented that “Hadley is a Sandusky waiting to be exposed.  Check out the view he has of Empire [Elementary School in Freeport, Illinois] from his front door.”  After some procedural skirmishes in state and federal court, Hadley brought suit against “Subscriber Doe a/k/a ‘Fuboy’” claiming the “Sandusky” comment was defamatory per se.  At the trial court’s prompting, Hadley subsequently added Comcast (Fuboy’s internet provider) as a respondent in discovery under Illinois Supreme Court Rule 224.  The trial court found that, because Hadley’s complaint stated a claim (under the requirements of 735 ILCS 5/2-615) for defamation per se, he was entitled to relief under Rule 224, and ordered Comcast to provide the identification.

Fuboy appealed but the appellate court affirmed, explaining that a plaintiff’s right to the identity of an anonymous poster should be determined based on whether the complaint could survive a motion to dismiss.

Ultimately, the Illinois Supreme Court agreed to hear Fuboy’s appeal and affirmed the lower courts’ rulings.

Most notably, the Court decided that it was sufficient to sue someone under their screen-name (e.g., Fuboy).   Under Illinois law, a complaint naming an unknown “John Doe” as a defendant is a legal nullity.  Fuboy argued for similar treatment because Hadley had not named an individual.  The Court disagreed because Hadley had not used “John Doe” simply as a placeholder for an unknown defendant.  Rather, the Court explained, “Hadley filed his claim against a real person, using a validly adopted alias chosen by the defendant.”  This holding should become more important as posters increasingly use screen names on social media platforms in lieu of their real names (e.g., Twitter, Instagram, Pinterest, YouTube, etc.)

On the anonymous poster question, the Court approved the motion to dismiss standard as the proper test for under Illinois Rule 224 for demonstrating a case has sufficient merit to obtain the identity of a person posting anonymously in order to bring suit against them.  The opinion therefore lays out a procedural road map for future litigation over anonymous internet comments in Illinois.

The Hadley case now returns to the trial court, where, presumably, Hadley will receive the defendant’s name.

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OSHA Issues Guidance on Restroom Access for Transgender Workers

The Occupational Safety and Health Administration (OSHA) has released a guide for employers on best practices regarding restroom access for transgender workers.  This release coincides with National LGBT Pride Month as well as Caitlyn Jenner’s appearance on the June cover of Vanity Fair.

OSHA’s Sanitation Standard requires employers to provide their employees with toilet facilities.  OSHA also requires employers to allow employees prompt access to toilet facilities and prohibits employers from imposing unreasonable restrictions on employee use of toilet facilities.  Consequently, the OSHA guide advances the principle that all employees—including transgender employees—should have access to restrooms that correspond to their gender identity.  The guide further explains that a person who identifies as a man should be permitted to use men’s restrooms, and a person who identifies as a woman should be permitted to use women’s restrooms.

OSHA also discourages employers from asking employees to provide medical or legal documentation of their gender identity in order to have access to gender-appropriate facilities.  OSHA has taken the position that the employee should determine the most appropriate restroom option for himself or herself.  Accordingly, OSHA suggests that employers may want to consider whether they should provide employees with single-occupancy gender-neutral (unisex) facilities or multi-occupancy, gender-neutral restroom facilities with lockable single occupant stalls.

Employers should keep in mind that they may be subject to other applicable federal, state, or local laws protecting transgender individuals in the workplace.  For example, the Illinois Human Rights Act prohibits unlawful discrimination in employment because of an individual’s sexual orientation, which includes “gender-related identity, whether or not traditionally associated with the person’s designated sex at birth.”  In addition, the U.S. Equal Employment Opportunity Commission, as well as other federal agencies and courts, have interpreted the federal prohibition on sex discrimination to prohibit employment discrimination based on gender identity or transgender status.

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Threat or Theatre?

The Supreme Court issued its opinion in Elonis v. U.S., commonly known as the “Facebook threats” case, earlier this week.   The case involved charges under the federal “threats statute,” which criminalizes communicating “any threat to injure the person of another,” that Elonis had posted threats on Facebook directed at various parties, including his ex-wife, local school children, and a federal agent.  One example:  “Enough elementary schools in a ten mile radius to initiate the most heinous school shooting ever imagined . . . the only question is which one?”   Another, likely directed at his ex-wife:  “I’m not going to rest until your body is a mess, soaked in blood and dying from all the little cuts.”  Not up to Shakespeare’s standards but, perhaps invoking Thalia, the muse of comedy and rustic poetry, Elonis posted disclaimers to that effect that he was simply writing rap lyrics, similar to some of Eminem’s songs.

Elonis allegedly began posting these and similar lyrics after his wife left him.  He persisted even after the postings caused him to lose his job and his ex-wife obtained a protective order against him. Likely it was employing his artistic license against the FBI that brought his work before a jury of his peers.

First Amendment lawyers eagerly awaited clarification of the distinction between “true threats” and protected speech in the wake of the Snyder decision, wherein the First Amendment protected the Westboro Baptist Church’s antics and hateful placards.  Offensive speech may not rise to the level of a threat, however, and, in any event, the Court eschewed a literary review.  It instead reversed on defective jury instructions that allowed a fact finder to short cut deliberations by assuming that a hypothetical “reasonable person” would have known that the threat would instill fear.  Explaining that “Federal criminal liability does not turn solely on the results of an act without considering the defendant’s mental state”  the Court held that the speaker must intend to instill fear in the subject of his threats, or know that the statement would have such effect, before even an objective threat became actionable.

This decision is consistent with courts’ reluctance to construe a statute so that negligence suffices for criminal liability and its insistence that one must have a culpable state of mind to be convicted.  Because proof of defendant’s intent was necessary regardless of whether the First Amendment applied, the Court found it unnecessary to address constitutional defenses. Although some expressed disappointment that the Court failed to resolve the ultimate question,  the doctrine of Constitutional avoidance dictates otherwise – i.e., when  a statute is susceptible to a construction that eliminates the need to decide novel Constitutional issues, courts should construe the statute narrowly.

The curtain has not closed on Elonis, however, because he can be retried under the standard articulated by the Supreme Court and his First Amendment defense remains in play.  Elonis may argue that, as a Facebook poster, he is entitled to the same protection enjoyed by musicians who release music to the population at large, but is posting ostensible threats within his own small social circle – knowing full well that the subjects will see them –comparable to Eminem?  One also might question whether the case should turn on defendant’s failure to display even rudimentary literary or social merit.

The case adds to the complications of prosecuting threat statutes, and may present an obstacle to prosecutions under recently enacted cyberbullying statutes.  It also may strike another nail in the coffin of those rarely used state criminal libel statutes.  A seminal First Amendment case decided over 50 years ago, Garrison v. Louisiana, held a Louisiana criminal statute unconstitutional because it allowed punishment of false statements against public officials without ill will or knowledge of their falsity.  The holding of Elonis may have broader reach since it was not decided on Constitutional grounds and therefore does not discriminate between public officials and private figures like Elonis’ ex-wife.

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Facebook and Your Digital Assets

Digital assets have come to permeate our lives.  They currently include items such as emails and email accounts, social network content and accounts, electronic documents, digital photographs, digital videos, database file sharing accounts, financial accounts, health care records and accounts, domain registrations, tax preparation service accounts, online store accounts and affiliate programs, and other online accounts.

As pointed out in our February Legal Update, individuals should consider providing for the disposition of digital assets, to the extent permitted by law, in their estate plans.  Service providers such as Facebook and Yahoo have proved reluctant to relinquish control over content (i.e., the “digital assets”) to anyone other than the deceased, impairing the ability of fiduciaries to carry out the wishes of the deceased.

Illinois Senate Bill 1376, currently before the General Assembly, is designed to overcome these obstacles.  The proposed Uniform Fiduciary Access to Digital Assets Act (“UFADAA”) would make it easier for Illinois fiduciaries to access the decedent’s digital assets.  Some observers have expressed concerns about abuses under UFADAA, such as over-reaching family members gaining access to sensitive information of the decedent.  As proposed, however, the UFADAA would not provide family members unfettered access, but instead only provide fiduciaries (e.g., executors and trustees subject to the duties of confidentiality, care, and loyalty) access to the extent permitted under federal law.

Still unresolved is how UFADAA would intersect with the Stored Communications Act under federal law, 18 U.S.C. §2701, et seq. (“SCA”), which prohibits Facebook and Yahoo from releasing stored data except under certain circumstances.  Complicating matters, UFADAA would apply to a broad class of digital assets while the SCA is limited only to electronic communications.  The SCA issue should be resolved over time.  One solution, for example, proposed by the American College of Trust and Estate Council is for Congress to legislate a fiduciary exemption under the SCA.

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There’s No Place Like Home (Unless Attendance Is An Essential Job Function)

A federal appellate court has rejected the EEOC’s claim that Ford unlawfully denied an employee’s request for a reasonable accommodation after she asked to work from home due to her irritable bowel syndrome.

The U.S. Court of Appeals for the Sixth Circuit in EEOC v. Ford Motor Co. concluded that if an employee’s job is interactive and requires regular and predictable on-site attendance, an employer may not have to allow working from home as a reasonable accommodation under the Americans with Disabilities Act (“ADA”). The court wrote that “with few exceptions, an employee who does not come to work cannot perform any of his job functions, essential or otherwise.”

This case revolved around Jane Harris, a former Ford resale buyer, an interactive position that required teamwork. (Harris later admitted that she could not do four of her ten main job duties at home.) Harris’s IBS caused uncontrollable diarrhea and fecal incontinence, however, so she requested leave to work from home up to four days per week. After meeting with Harris twice to review accommodation options, Ford declined her telecommuting request as unreasonable because the excessive absences would prevent Harris from effectively performing her job responsibilities. Ford did offer Harris two alternative accommodations, which she rejected. Harris then filed a discrimination charge with the EEOC. Four months later, Ford discharged Harris for poor performance. The EEOC subsequently sued Ford, alleging disability discrimination, failure to reasonably accommodate Harris’s disability, and retaliatory discharge.

The Sixth Circuit sided with Ford, holding that while a reasonable accommodation may include job restructuring or a modified work schedule, removing an essential function from the position was per se unreasonable. The court concluded that regular, predictable in-person attendance “is an essential function … of most jobs, especially the interactive ones.” The court found that Harris’s proposed unpredictable ad hoc telecommuting schedule was not reasonable because it removed at least one essential function from her “highly interactive” job.

The Sixth Circuit’s decision is binding in federal courts in Kentucky, Michigan, Ohio, and Tennessee. Until other courts look to this recent case for guidance, employers may need to keep in mind that the EEOC takes a different enforcement position. The EEOC noted in its 2002 Guidance on Reasonable Accommodation and Undue Hardship under the ADA, “certain courts have characterized attendance as an ‘essential function.’ … Attendance, however, is not an essential function as defined by the ADA because it is not one of ‘the fundamental job duties.’” Employers should carefully review any reasonable accommodation requests for telecommuting arrangements to determine whether the request should be granted based on factors such as the employee’s job duties and the extent to which face-to-face communication or on-site attendance is required, his or her past performance, existing telecommuting policies or practices, and any potential alternative accommodations.

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Plug or Perish

FVLD Member Neil Rosenbaum will be a panelist at the Chicago Masters Conference for Legal Professionals on Managing the e-Discovery and Social Media Minefield.  The Masters Conference is an educational forum that convenes a series of events each year throughout the United States featuring thought leaders in areas such as e-discovery and data protection.  Neil’s panel will address the impact of social media on litigation risks and costs.

The Chicago event will be held on May 19, 2015 and will include CLE-accredited breakout sessions. For more information or to register, please visit http://themastersconference.com/events/chicago-2015.

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Ooh, Baby Love: The Supremes Rule in Favor of Pregnant Employee

For the first time in years, the U.S. Supreme Court has issued an opinion on the scope of the Pregnancy Discrimination Act (“PDA”).  In Young v. UPS, the Supreme Court ruled that a pregnant worker could bring a claim of discrimination against her employer who treated her request for accommodation less favorably than non-pregnant workers who received accommodations for other reasons.

While the long-term impact of Young remains to be seen, lower courts already have started to apply the decision.  See, e.g., Pelkey v. Colo. Dep’t of Labor & Emp’t, No. 14-cv-02205, 2015 WL 1740453 (D. Colo. Apr. 14, 2015).  Further, as of January 1, 2015, Illinois law requires employers with one or more employees to reasonably accommodate pregnant workers.

By way of background, Title VII of the Civil Rights Act of 1964 prohibits a covered employer from engaging in sex discrimination.  The PDA extends Title VII’s prohibition to discrimination based on pregnancy, childbirth, or related medical conditions.  The PDA also requires employers to “treat women affected by pregnancy … the same for all employment-related purposes … as other persons not so affected but similar in their ability or inability to work.”  It appears now that UPS interpreted this requirement too narrowly by assuming that other persons whom UPS accommodated had to be similar in all ways but pregnancy in order for the policy to be discriminatory.

Young v. UPS arose from a pregnant employee’s request for “light duty” because she could not pick up heavy packages.  UPS required its drivers to be able to lift packages weighing up to 70 pounds.  When Young, a part-time driver for UPS, became pregnant after several miscarriages, her doctor told her she should not lift more than 10-20 pounds.  UPS then told Young she could not work.  Young stayed at home without pay during her pregnancy, lost her employee medical coverage, and subsequently sued UPS for refusing to accommodate her.

UPS did offer accommodations, however, to employees who suffered from on-the-job injuries or permanent disabilities and to drivers who lost their certifications.  UPS argued that these “pregnancy-blind” policies only offered accommodations for neutral and legitimate business reasons and therefore did not discriminate based on pregnancy.

The Supreme Court rejected this argument, holding that Young could argue that UPS’s reason was pretextual.  In other words, Young could present evidence showing that UPS accommodates most nonpregnant employees with lifting limitations while categorically failing to accommodate pregnant employees with lifting limitations.  The Court also found that the lower court failed to consider why UPS could not accommodate pregnant employees when it accommodated so many others, the combined effects of these policies, and the strengths of UPS’s justifications for each.

Finally, while the Supreme Court ruled in favor of Young, it rejected the EEOC’s 2014 Enforcement Guidance on pregnancy discrimination.  In response, the EEOC has recently announced that it will be revising the Guidance.  Both employers and pregnant workers should be on the lookout for the updated Guidance in the near future.

In the meantime, employers may need to carefully review their policies for their combined effects on pregnant employees (e.g., equal employment opportunity, disability, accommodation, anti-discrimination, and leave-related policies) to make sure they are consistent with Young as well as Illinois law.

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You Don’t Have to Friend Your Boss in Montana (Among Other States)

On April 23rd, Montana became the 20th state (joining Maryland, the first to pass such a law, as well as Arkansas, California, Colorado, Illinois, Louisiana, Michigan , Nevada, New Hampshire, New Jersey, New Mexico, Oklahoma, Oregon, Rhode Island, Tennessee, Utah, Virginia, Washington and Wisconsin) to limit the ability of employers to require access to an employee’s, or a job applicant’s, social media account.  Montana’s law makes it illegal for employers to require, or even request, an employee’s or applicant’s social media usernames and passwords, that an employee or applicant log onto their social media account in the presence of the employer, or that an employee or applicant divulge their social media account or information contained on the account.  Employers are also barred from disciplining, firing or retaliating against an employee for refusing such a request.

However, Montana’s new law does provide some exceptions under which the employer is authorized to request, and the employee is required to provide, such information.  These situations include if the employer has “specific information” indicating that the employee committed work-related misconduct, or made an unauthorized transfer of company proprietary, confidential or financial information to an online account or service, or in order to comply with federal laws or certain types of regulatory requirements.  The company can also request, and the employee is required to provide, social media information if there is an ongoing investigation and the employee’s information is required in order to make a factual determination.  It is worth noting that the employee can seek an injunction to prevent being required to turn over social media information under these circumstances.

It will be interesting to see how the new law will be interpreted, such as whether a simple “friend” (on Facebook) or “connection” request (such as on LinkedIn) is sufficient to violate the law, if it does whether there are circumstances that make such a request acceptable, how “specific” the “specific information” needs to be to justify a request, what types of investigations qualify within the exception to allow a request, and what is considered “work-related misconduct” sufficient to meet that exemption.

In other recent news on social media privacy laws, an amendment to Arkansas’ social media privacy law that sought to exempt religious organizations and businesses that are entrusted with the care of children (such as schools, daycares, summer camps, etc.) did not pass the Arkansas senate.  Supporters claimed the exemption would assist in the protection of minors by allowing better screening of individuals that care for children.  Opponents of the bill, however, cited a concern over the privacy of teens, who are often hired as summer camp counselors and employees.

Numerous other states are also in the process of considering new laws on social media privacy, looking at amendments to their current laws on the issue, or exploring specific areas of social media privacy (such as in school settings).  As this type of legislation continues to be introduced, become law, be amended, and be interpreted by the courts, employers and employees should be sure to consult an attorney when these types of issues arise.

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What’s in a Name? Unidentified Professor’s Defamation Claim Dismissed

As reported in the Chicago Daily Law Bulletin (login required), an Illinois appellate court affirmed dismissal of a Northwestern University professor’s lawsuit against media outlets over headlines reporting that he was alleged to have “raped” a student.  See Ludlow v. Sun-Times Media, LLC et al.  Although Professor Ludlow admitted that a student accused him of getting her drunk before sexually assaulting her in his apartment, his complaint contended that the Sun-Times’ headline summarizing the sexual assault allegations as “rape” damaged his good name.

The problem, according to the appellate court, was that his good name appeared nowhere in the headline, let alone the underlying article.  As a result, the headline could have referred to some other Northwestern philosophy professor besides Ludlow.  Under Illinois’ innocent construction rule, the availability of this alternate interpretation was fatal to the claim of defamation per se.  The appellate court found too many degrees of separation since readers could identify Ludlow only by looking up the student’s federal complaint against Northwestern University over its handling of the situation.

Having disposed of the case at the threshold, the appellate court did not reach the lower court’s alternative grounds for dismissal, e.g., that  the headline was substantially true because “rape” and “sexual assault” are regarded as synonyms in both legal and common usage and, in any event, the severity of the students’ allegations equated to a rape.  The lurid allegations included that the professor insisted the student consume alcohol, despite being under drinking age, until she became so intoxicated that she blacked out.  The student alleged that Ludlow denied her request to be driven home and took her to his apartment building, where he began “furiously making out” with her in an elevator and told her it was “inevitable” that they would have sex.  The student’s next recollection, according to her court filings, was waking up in Ludlow’s bed with his arm around her.

The appellate court’s avoidance of the alleged rape/sexual assault distinction also leaves unresolved a heated academic debate that followed the trial court’s decision.  A University of Chicago philosophy professor was criticized by a feminist philosopher for, in her view, downplaying the suffering of victims of sexual assaults which the U of C professor felt did not qualify as rapes.

Although the decision to protect individuals by withholding their names may have been justified given the particular circumstances (unproven civil allegations involving private persons), the corollary, which the court inadvertently illustrated, is that protecting Ludlow’s name did not clear the other philosophy professors at the school.  Ultimately, however, the publicity attending the student’s lawsuit against the University sparked a firestorm of protests at two campuses (Northwestern and Rutgers, which had reportedly been considering offering a job to Ludlow prior to the lawsuit) and a spiral of lawsuits between the professor and student and the school.

FVLD represented Sun-Times Media, LLC, which published the report at issue through its wire service.  The article was then picked up by the other defendants.

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Mr. Cub and the Presumptively Void Transfers Act: What if?

Ernie Banks, “Mr. Cub” passed away in January of an apparent heart attack.  Only three months prior to his death, Banks executed a new Will cutting out his family and leaving his estate to his longtime caregiver, Regina Rice.  Within weeks of Banks’ funeral, his family accused Rice of taking advantage of the Hall of Famer when his health had deteriorated by forcing him to execute the new Will in her favor.

A Cook County judge subsequently confirmed the Banks’ Will over the family’s objections.  Attorneys for the Banks’ family have reportedly said they will appeal.  Had Banks executed the Will on or after January 1, 2015, however, Illinois’ new Presumptively Void Transfers Act (“the Act”)  (Public Act 098-1093) would have applied to the dispute, potentially voiding the transfer to Rice.

Essentially, the Act adds provisions to the Probate Act of 1975 to facilitate family challenges to testamentary gifts made to a “caregiver” by means of a will, trust, deed, contract, or beneficiary designation form.  A caregiver under the Act is a non-family member who has assumed reasonability for all or a portion of the care of an individual making the testamentary transfer who needs assistance with daily living activities.  If the validity of the testamentary gift is challenged (as in Banks’ case), then there is a statutory presumption that the transfer to the caregiver is void if the fair market value of the transferred property exceeds $20,000.

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“Double Dipping Doctor” Defamation Dispute Dismissed

An Illinois appellate court affirmed the dismissal of the former Chief of Osteopathic Surgery at Stroger Hospital’s complaint against various media outlets for reporting that the hospital overpaid him tens of thousands of dollars via direct deposit while he was on an unpaid leave and working in a private clinic elsewhere.  See Kapotas v Better Government Association et al. The plaintiff claimed that he never noticed the County’s deposits in his checking account, which approximated $80,000 over several months, and that he repaid the hospital upon request.

FVLD represented Sun-Times Media, LLC, which reported the overpayments in its Chicago Sun-Times newspaper.

The appellate court held that the plaintiff was not defamed because the news reports were properly construed as blaming the County for payroll errors.  The court rejected the plaintiff’s contentions that references to an ongoing investigation by the Inspector General implied criminality or that referring to him as the  “double dipping doctor” imputed embezzlement (as opposed to the undisputed fact that he was paid by the County while practicing elsewhere).  Indeed, the court recognized the plaintiff could not prove falsity in light of his fundamental admission to receiving the payments. Significantly, the court protected the right to publish condensed or even sensationalist headlines so long as the accompanying article, read in conjunction with the headline, is substantially true.

The court also rejected related tort claims, including that the defendants interfered with the plaintiff’s relationship with a job recruiter and invaded his privacy by publishing his compensation.  Ultimately, the court recognized that the public’s interest in overpayments to public employees outweighed plaintiff’s personal privacy.

While the court found these news reports were factually correct, sometimes published statements simply lack enough factual content to support a defamation claim. In an earlier defamation case in which FVLD represented a successful defendant, the Illinois Supreme Court explained that the distinction between fact and opinion depends on whether the statement is an “objectively verifiable assertion.”  See Imperial Apparel v. Cosmo’s Designer Direct, et al. Statements presented as opinions that contain or allude to false facts may rise to defamation, but the Court held that a retailer’s ad disparaging its competitor did not cross the line.

Interestingly, the United States Supreme Court recently extended an analogous defense to the securities laws by holding that an opinion expressed in a company’s registration statement did not constitute an untrue statement of material fact under the Securities and Exchange Act.  The Court found that a statement by pharmacy-services company Omnicare that “[w]e believe our contract arrangements with other healthcare providers, our pharmaceutical suppliers and our pharmacy practices are in compliance with applicable federal and state laws,” was not a “fact”, although it could become actionable if the registration statement omitted known facts contrary to those implied by management’s opinion.  Accordingly, we foresee that metaphysical debates over the opinion/fact dichotomy will increasingly permeate legal disputes.

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New Facebook Message: You’ve Been Served

In a recent case, a New York judge authorized the use of Facebook as the only required means to deliver a summons to the defendant.

The plaintiff brought a divorce action against her husband, but (a) the only address she had was not current and he left no forwarding address, (b) the department of motor vehicles did not have his address, (c) he had no known regular place of business, (d) his pre-paid cell phone had no address attached to it, (e) he stated to the plaintiff that he had no regular residence and no regular employment, and (f) the private investigation firms hired by the plaintiff could not find him.  Despite all these efforts to disappear, the overwhelmingly powerful lure of social media caused him to maintain his Facebook account on which he posted regularly and which he used to communicate with the plaintiff.  He also communicated with her by texting.

The plaintiff therefore asked the judge to approve alternative service through a Facebook private message.  Judge Matthew F. Cooper reviewed the plaintiff’s submissions to ensure, among other things, that other service was not possible and service by Facebook complied with due process.  Judge Cooper found that no other New York methods of service were possible other than newspaper publication, which was less likely to reach the defendant.  Also finding the evidence supported that the Facebook account belonged to the defendant (as opposed to an imposter or the plaintiff herself) and that he regularly used it, Judge Cooper authorized service to be made as follows: once a week for three consecutive weeks, the plaintiff’s attorney (since litigants cannot serve another litigant under New York Law) had to log into the plaintiff’s Facebook account and send a private message to the defendant; the attorney would identify himself as an attorney, notify the defendant of the suit, and include a link or image of the summons; and, after the first message, the attorney and the plaintiff had to call and text the defendant and inform him that a summons had been served on him through Facebook.

The increasing prevalence of technology and social media should result in more examples of online service because many other states have statutes that allow judges to craft remedies for service when customary methods are insufficient.  Federal courts and many state courts allow electronic service of non-case initiating documents and, in our experience, judges have become more amenable to allowing complaints to be served electronically as long as it appears that the defendant’s email address or other account is current. As Judge Cooper noted, “In this age of technological enlightenment, what is for the moment unorthodox and unusual stands a good chance of sooner or later being accepted and standard, or even outdated and passé.”

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Another Business Learns The Power of Social Media

Recently, Indiana passed a law called the “Religious Freedom Restoration Act”.  Regardless of your views on that law, its propriety, and its purpose, its enactment empowered business owners to publicly express their religious beliefs.  One such business was Memories Pizza.  After the law was enacted, the owners of Memories Pizza made statements indicating that their business would refuse business from homosexual couples for weddings.  As soon as they made their statement, a social media firestorm erupted.

The attacks occurred on virtually every venue on social media.  Numerous negative and parody posts and pictures appeared on Memories Pizza’s Facebook page, a few Facebook users created fake and commentary Facebook pages, Memories Pizza’s Google Maps listing was changed to “Gay Memories Pizza”, hundreds to thousands of Yelp! Users posted negative, critical and parody comments, and someone even purchased the domain name “memoriespizza.com” (which apparently was not owned by the business) to post pictures and make commentary.  According to various reports, the business was also inundated with threatening messages and phone calls, including at least one specific threat of violence posted on Twitter (the poster, a high school coach, was identified and suspended from his job).  In fact, so great was the wave of criticism that Memories Pizza decided to close its doors.

This incident does not mean that people and businesses should be afraid to express their views, after all this is the United States.  But businesses that weigh in on hotly contested, debated and emotional issues must take care to be prepared for any potential backlash.  When considering weighing or getting involved in such issues, businesses should account for (a) how they will be utilizing social media in making comments, (b) how they will deal with negative reactions and reviews on social media as a result of their commentary, and (c) how to protect their brand reputation and image (both proactively and defensively).  Having legal guidance in these areas ahead of time can help, and any business that is using, or plans to use, social media and the web for business purposes should take time to examine the legal and other protections and risks that exist.

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