As reported by the Chicago Daily Law Bulletin, Judge Edmond Chang of the Northern District of Illinois denied a defense summary judgment motion in a retaliation and wrongful discharge case brought by a former employee. (Truth in labeling: FVLD represented the successful plaintiff.) The court found that the plaintiff’s support for a co-worker who filed a charge of discrimination against the company constituted protected activity under the Civil Rights Act of 1964 even if the plaintiff did not actively participate in the investigation or formally testify. The court also found that, although 20 months passed between the protected activity and discharge, the “chain of negative job actions” was enough for a jury to conclude that the company retaliated because of protected activity.
FVLD’s January Legal Update discusses significant new laws that will affect both individuals and businesses in Illinois this year. In short, if your New Year’s Resolutions for 2015 included making surreptitious recordings of private conversations and posting revenge porn online, it looks like you may have picked the wrong year. Click here to read the Update.
Two professors who contribute to a blog called CSU Faculty Voice sued Chicago State University officials over CSU’s “Cyberbullying Policy,” which prohibits electronic communications that have an “adverse impact on the work environment of a CSU faculty member or employee.” The bloggers seek an injunction against enforcement of various policies to silence the blog, arguing that enforcement would contravene Supreme Court precedent barring public employers from retaliating against employees for protected speech. CSU countered that, although it had requested civility, it never stated that it would enforce its policies to stifle protected speech, and that the cease and desist letter it sent the bloggers primarily focused on claims of trademark infringement.
Denying the CSU defendants’ motion to dismiss, the court in Beverly v. Watson found that the faculty bloggers claim was “ripe” because the University sent them the aforementioned letter demanding they take down the blog due to violations of “the University’s values and policies requiring civility and professionalism.” Although federal suits seeking “advisory” opinions on hypothetical controversies generally must be dismissed, the court found that CSU’s letter could be read as a threat to enforce the policies against the bloggers and therefore was sufficient to show that there was a live dispute between the parties.
The Court also rejected CSU’s argument that the faculty bloggers did not specify what expressive speech was chilled: “Here, the general tenor of the speech at issue is not speculative: the plaintiffs clearly wish to continue to criticize CSU’s administration as they have done in the past.” Finally, the CSU defendants contended that, because their cease and desist letter mainly threatened trademark claims — based on the blog’s use of CSU’s name and logo — a ruling on the policies would not impair the bloggers’ right to continue blogging. The court, however, noted that the plaintiffs did not seek trademark-related relief. Therefore, the trademark issues did not impact the redressability of the First Amendment complaint. In any case, CSU’s trademark theory would face challenges because the blog used CSU’s marks in a critical context, not a commercial one likely to confuse readers into thinking that CSU endorsed the blog.
Although the Beverly case deals with First Amendment issues unique to public employers, similar policies adopted by private employers may run afoul of the National Labor Relations Act because they could dissuade employees from discussing working conditions.
With the Compassionate Use of Medical Cannabis Pilot Program Act, Illinois has joined a growing number of states that have legalized marijuana under various circumstances, although no dispensaries are up and running yet in Illinois. (For a comprehensive summary of the Act, please see our December 2013 Legal Update.) While no Illinois court has yet ruled on the new medical marijuana law in the employment context, the Illinois Appellate Court has recently issued a decision on an employee’s off-duty use of marijuana.
In Eastham v. Housing Authority of Jefferson County, the court ruled for an employee who challenged the denial of unemployment insurance benefits after he was fired for violating his employer’s drug- and alcohol-free workplace policy. While working for the Housing Authority of Jefferson County, William Eastham was required to submit to a random drug test pursuant to the Housing Authority’s drug- and alcohol-free workplace policy. Eastham told his supervisor that he had smoked marijuana twice during a recent vacation and that he believed he would fail the drug test. The Housing Authority discharged Eastham for violating its policy before his test results were available. (His drug test came back negative.)
Eastham then filed a claim for unemployment insurance benefits. The Illinois Department of Employment Security denied Eastham’s claim because he had violated his employer’s drug- and alcohol-free workplace policy and “his choice to use the drug represent[ed] willful misconduct.” Under the Illinois Unemployment Insurance Act, an employee discharged for misconduct is ineligible to receive unemployment benefits. The Housing Authority’s policy stated that the “possession, use, consumption or being under the influence of a controlled substance … while in the course of employment of the Housing Authority” violates the terms of employment. Eastham appealed, arguing that the policy should not apply because the phrase “while in the course of employment” should not include his vacation. In response, the Housing Authority argued that its policy was required in order to receive federal funding and must be interpreted to include even time away from work.
Ultimately, the Eastham court disagreed with the Housing Authority, holding, for purposes of contesting unemployment benefits, it was unreasonable for a policy to deem off-duty marijuana use as “misconduct” absent a positive drug test. The Court further found that eligibility for federal funding did not require the discharge of employees for off-duty marijuana use. The court also rejected the argument that Eastham violated the policy by coming to work when he believed that he was under the influence of marijuana, noting that even if Eastham believed there was marijuana in his system, he did not test positive for drugs.
The court emphasized, however, that its decision only addressed whether Eastham’s conduct would amount to “misconduct” that would disqualify him from receiving unemployment insurance benefits. It did not address whether the Housing Authority was entitled to fire Eastham for his admitted marijuana use. The Housing Authority has since asked the Illinois Supreme Court to review the decision.
Switching from Twitter to taxes, the belated passage of the Tax Increase Prevention Act of 2014 (“TIPA”) retroactively extends a package of “temporary” tax breaks for 2014. See https://www.congress.gov/bill/113th-congress/house-bill/5771. TIPA generally provides a 1-year extension for over 50 expired or expiring individual, business, and energy provisions. The following is a summary of key provisions: Continue reading
Sales of downtown Chicago office properties increased by 13 percent above the full-year total for 2013, and the 2014 sales total of $3.68 billion to date is the highest since the 2008 crash. Low interest rates and comparatively higher prices on both coasts combined with the lowest vacancy rate in five and a half years to push investment towards Chicago.
Several notable sales in the River North area have driven the average price per square foot for downtown office buildings to $302, an all-time high (paywall). The 60-story tower at 300 N. LaSalle Street set records for total price and price per square foot at $850 million or $652 per square foot. The 46-story building at 353 N. Clark went for $715 million – the fourth highest sale price and the second highest price per square foot in city history. Other key sales include our own building located at 55 W. Monroe Street, which sold to a U.S. affiliate of Canadian insurer Manulife Financial for $244 million.
The downtown apartment market also broke records in 2014. Heitman, a Chicago-based real estate investment management firm, is in the process of acquiring a 504 unit building on Wacker Drive for a record price of $331 million or $661,000 per unit. After hitting an all-time high of $2.78 per square foot in the second quarter, the net effective rent for Class A downtown apartment buildings fell slightly but is still up 5.1 percent from 2013.
In sum, 2014 office buildings sales are already the third highest in Chicago history, and end-of-year deals could increase the final total to more than $4 billion. With rising rental rates and construction costs, the increased demand for office buildings likely will continue.
Following the recent cyber-attack on Sony Pictures Entertainment, numerous media outlets received a threatening letter from David Boies, Sony’s lawyer, demanding that they not republish or otherwise use the hacked Sony documents and destroy any copies that they may have. The letter warns that Sony “will have no choice but to hold you responsible” if the documents are “used or disseminated … in any manner.” There is at least an element of consistency in Sony’s decision to capitulate to the hackers by self-censoring its film project while demanding similar deference from the press.
Not only would Sony find it extremely difficult to enjoin the press from reporting on the hacked Sony documents, but it also might not be able to recover monetary damages from leaks reported in the press. The First Amendment allows the press to publish information that might otherwise be private if it is newsworthy, even when it is obtained unlawfully (or “stolen,” as Boies repeatedly claims).
In Bartnicki v. Vopper, the U.S. Supreme Court held that the First Amendment protects reports about a matter of public concern even if they disclose the contents of illegally obtained communications. Bartnicki involved a radio station’s broadcast of parts of a private phone conversation discussing a labor dispute, which had been illegally intercepted by a third party. Vopper, the radio commentator who had received and broadcast the recording, had reason to know that the conversation was unlawfully obtained. Nevertheless, the Supreme Court found that the subject matter of the conversation was newsworthy, noting that the press had the right to publish information of “great public concern” obtained from documents stolen by a third party.
Moreover, U.S. courts are reluctant to second-guess journalists with respect to what information qualifies as newsworthy and instead defer to the editorial judgment of the press. Today’s saturated social media environment only amplifies the difficulty in corralling “news” into traditional topics.
The Bartnicki Court did acknowledge, however, that some intrusions on privacy are qualitatively more offensive than others. Leaks and scoops are a staple of Hollywood reporting but, according to Boies, some of the leaked information includes trade secrets and confidential information about Sony’s employees. Some, like Aaron Sorkin, have taken a moralistic position that news outlets are “spectacularly dishonorable” for publishing Sony documents. Others, like Andrew Wallenstein of Variety, have concluded that, despite potential journalistic ethical concerns, the Sony hack cannot be ignored and details should be reported because it is newsworthy.
Sony might have stronger footing for protecting truly private information. The Seventh Circuit has observed that, despite “the modern Supreme Court’s expansive view of freedom of speech and of the press … the Court has not yet completely extinguished state-law protections … against publication of intimate details of people’s private lives.” The federal appellate court reiterated that it has recognized a constitutional right to the privacy of medical, sexual, financial, and perhaps other categories of highly personal information. If, for example, news outlets were to publish social security numbers, a court may find this “highly personal information” is not of “great public concern.” It is less likely that a consensus would form over protecting details of celebrity and film executive compensation.
Rulings on an attorney’s complaint against online media outlets for reporting on sex charges against him present a mixed bag. In Huon v. Breaking Media et al., a federal judge in Chicago dismissed the attorney’s claims against Gawker Media, publisher of the blog Jezebel, but allowed some of his claims against the legal blog Above the Law to survive.
The plaintiff attorney was charged in 2008 with sexually assaulting and abusing a woman he met through a craigslist ad purporting to recruit promotional models and he was subsequently accused of cyberstalking and witness harassment. All charges, however, were disposed of by acquittal or dismissal.
Despite alleged discrepancies in the reports, the court determined that the defendants generally published “fair reports” of the charges and the attorney’s ensuing civil litigation against media and law enforcement. Most jurisdictions allow the media to summarize public records and proceedings without having to fact check whether allegations made therein are true or false. Moreover, to allow sufficient First Amendment “breathing space,” the report need only to capture the “gist” or “sting” of the allegations, even if it gets some details incorrect.
Of interest is the court’s ruling that the attorney could not recover for substituting the word “rape” for “sexual assault” because the two terms are interchangeable. Earlier this year, an Illinois judge dismissed a similar case brought by a Northwestern philosophy professor against the Sun-Times (in the interests of full disclosure, FVLD represented the defendant). The professor alleged he was defamed when a headline substituted “rape” for “sexual assault” to summarize allegations against him by a student. The court however, not only found that the words were synonymous but also that the student’s allegations, including that the professor got the underage student intoxicated, refused to return her to campus, groped her in an elevator when she lost consciousness and “sexually assaulted” her in his apartment, amounted to rape in common parlance. The professor has appealed. Continue reading
Some courts have begun to question whether Congress could have anticipated the current scope of the Internet in 1996, when it immunized websites from liability for third party content regardless of whether the site makes any effort to monitor the content or ensure its accuracy. Still, as discussed in FVLD’s recent Legal Update, courts have left the issue in the hands of Congress, leaving plaintiffs brave (or wealthy) enough to challenge Section 230 to seek workarounds.
One such recent lawsuit suggests that businesses concerned about their e-reputations may face problems other than Yelp reviews. The plaintiff in Serbian Crown, Virginia, Inc. v. Google, Inc. blamed its restaurant’s closing on Google Maps users manipulating its listing, so that Serbs seeking specialties like lion and antelope meat believed the restaurant was closed weekends. Although doubters may suggest that the restaurant failed because of its narrow niche or because unappetizing reviews prompted readers to venture elsewhere for emu, Serbian Crown had reportedly been in business for decades in an area with little foot traffic prior to the appearance of the erroneous Google Maps listing. A Wired article about the lawsuit suggests that the allegations are consistent with numerous other instances of competitors sabotaging businesses’ Google Maps listings to gain an advantage.
Serbian Crown brought a negligence claim and a claim for false advertising under the federal Lanham Act. It contended that Google uses its public listings as a “lead-in for purposes of selling advertising” to businesses, and that Google “knew or should have known” that allowing users to post false information regarding a restaurant’s hours “would pose a substantial danger of economic harm to” Serbian Crown. Given that Yelp has survived allegations that it manipulated its ratings to reward advertisers at the expense of others, Google’s business motives are unlikely to affect the outcome for Section 230 purposes.
Predictably, Google filed a motion to dismiss the lawsuit, citing Section 230 with respect to the negligence claims and arguing that, among other things, Serbian Crown lacks standing to allege false advertising under the Lanham Act because Google was not Serbian Crown’s competitor. Perhaps realizing that establishing negligence or even willful disregard by Google will likely not suffice under Section 230, Serbian Crown voluntarily dismissed its negligence claim. Its response brief, however, correctly noted that the recent Supreme Court case, Lexmark International, Inc. v. Static Control Components, Inc., rejected Google’s argument that false advertising claims under the Lanham Act are only available to direct competitors.
Google’s reply brief apologizes for missing the Lexmark case but argues that Serbian Crown’s claim still must fail because it cannot show that the erroneous listing caused its damages, and because the listing is not actionable “commercial speech” under the federal Lanham Act since it did not advertise a product or service. Google also argues that Section 230 bars the Lanham Act claim in addition to the negligence claim, although the court could ignore this argument since it was not raised in Google’s initial brief. Section 230’s immunity does not extend to intellectual property claims, and the Lanham Act is an intellectual property (trademark) statute, but Google argues that Serbian Crown’s purported cause of action did not relate to intellectual property but rather deceptive advertising.
Although Serbian Crown still faces significant obstacles, especially establishing that the listing qualified as an advertisement, it will be interesting to see whether this court or others allow Lexmark to operate as a Section 230 workaround. Until then, a business’s best option when it comes to Google Maps may be to simply claim its own listing, so that it can take control of the listed address, hours of operation, and so on. A consultant for Serbian Crown (the owner did not own a computer and had never used Google) eventually tried this, but by that time it was allegedly too late, and the restaurant could not recover.
Google has started to remove individuals’ search results from its European websites due to the “right to be forgotten” ruling by the European Court of Justice (ECJ) last month. Within weeks of the ECJ’s ruling, Google has already received more than 41,000 requests to remove information through its online form.
On May 13, 2014, the ECJ held that an individual’s fundamental right to privacy includes the “right to the protection of personal data,” and the “right to be forgotten” in Google Spain v. González. In its opinion, the ECJ acknowledged Google, as a search engine operator, may have legitimate economic interests and that the general public may have an interest in finding information. The ECJ concluded, however, that such interests can be overridden by the right to privacy with respect to an individual’s personal data and the right to be forgotten.
The ECJ found that the right to be forgotten means that where search result information “appears … to be inadequate, irrelevant or no longer relevant, or excessive in relation to the purposes of the processing at issue carried out by [Google], the information and links concerned in the list of results must be erased.”
The ECJ ordered Google to comply with individuals’ requests for removal of links containing personal data by removing them from the search results of a Google search for the individual’s name. The ECJ further ruled that Google must remove the personal information even when including the information would otherwise be legal.
That being said, U.S. privacy law likely will not recognize a “right to be forgotten” any time soon. Moreover, Section 230 of the Communications Decency Act (CDA) generally provides immunity to computer service providers who publish information provided by others. Further, the First Amendment generally prohibits prior restraints of publication, and a U.S. plaintiff is unlikely to obtain an order requiring Google to remove truthful information.
It is worth noting that the CDA’s immunity does not extend to intellectual property claims. Many states recognize a “right of publicity,” or a right to control the commercial use of one’s identity, which is sometimes classified as an intellectual property right. Some district courts have suggested that service providers should not be immunized by the CDA from claims alleging violations of the plaintiff’s right of publicity. Still, a publicity plaintiff would likely have trouble convincing a U.S. court that a Google result constitutes a commercial use of his or her identity or that publicity protections should trump the public interest in availability of information. We have previously written about one such plaintiff who unsuccessfully sued Yahoo! for trademark violations and later unsuccessfully sued Google for right of publicity violations because search results linked her name to male sexual enhancement medications.
A federal appellate court rebuffed an attempt by a “porno-trolling collective” to obtain identifying information regarding hundreds of individuals who may have downloaded copyrighted adult films. The plaintiff purchases copyrights in pornographic films and then issues subpoenas to internet service providers, seeking the identities of subscribers for the accounts reflecting infringing downloads. The court determined that the company had no basis to believe that those it subpoenaed resided in the judicial district where it filed its lawsuit. Apparently, some of the subpoenaed ISPs did not even offer services in the District of Columbia.
The court noted that the law firm behind the suit would generally seek to negotiate a settlement after identifying an alleged infringer, and “was highly successful because of statutory copyright damages, the potentially embarrassing subject matter, and the high cost of litigation.” If anyone sought to litigate rather than settle, the court explained, the firm would simply dismiss the case and move on to the next alleged infringer. The court’s description of the troll’s “modus operandi” is reminiscent of Righthaven – the company that made a business of purchasing copyright claims (but often not the actual copyrights) from newspapers and then suing bloggers who quoted from the copyrighted stories. Some defendants prevailed on “fair use” or other defenses, but many others likely settled to avoid legal fees, potentially without knowing their rights under the copyright laws and the First Amendment.
A National Arbitration Forum arbitration panel ordered the “chicagasuntimes.com” domain name transferred to Sun-Times Media despite the registrant’s “parody” defense. See Sun-Times Media IP, LLC v. WUITAS, Inc. d/b/a ABILICOM / Manager Domain, FA 1525208 (Nat. Arb. Forum Nov. 24, 2013). The Sun-Times filed a “typosquatting” Complaint under ICANN’s Uniform Domain Name Dispute Resolution Policy but the registrant, WUITAS, Inc., argued that the domain name resolved to a protected “parody” of the Chicago Sun-Times newspaper, headed: “CHICAGA SUN-TIMES: Nuze, Sperts, Weetha, an’ Bitcharys translerated inta Chicaga Gangsta.” The site, however, included pop up advertising from “Ad Choices” and pay-per-click hyperlinks to third-party websites.
WUITAS explained that it had purposefully chosen the disputed domain name with the deliberate misspelling to comport with the “theme” of its website, which was to parody the Chicago Sun-Times website by translating it into Ebonics (called “Gangsta”) and that “Respondent famously maintains over 100 similar sites.” The NAF Panel, however, agreed with the Sun-Times that the “parody” was simply an infringing derivative work and:
“Whether that is done for parody or not (and whether or not that action could properly be described as parody) is . . . irrelevant since without Complainant’s permission it is not good faith behavior to mimic Complainant’s trademark, take copyright or other material originating with Complainant and translate it, and then offer that translated material at a revenue generating location.”
After the Sun-Times discovered two more typosquatting domain names, “chicagasuntimez.com” and “chicagosuntimez.com”, a new NAF panel found Respondent to be a “serial cybersquatter” and ordered transfer of those domain registrations as well. Sun-Times Media IP, LLC v. Manager Domain/WUITAS, Inc. d/b/a ABILICOM/PrivacyProtect.org , Claim Number: FA1402001542793 (Nat. Arb. Forum March 22, 2014). In the interests of full disclosure, Funkhouser Vegosen Liebman & Dunn Ltd. – the law firm behind Post or Perish – represented the Sun-Times.
Online review site Yelp recently continued its winning streak against businesses attempting to hold the site liable for allegedly defamatory content posted by users. Courts have consistently held that Yelp does not forfeit its right to immunity for third party content under Section 230 of the Communications Decency Act by choosing which reviews to display and which reviews to count in its “star rating” system. The latest such case, involving a negative review of a Washington locksmith, is Kimzey v. Yelp, which cited previous appellate cases and held that the star rating system “does not transform [Yelp] into a developer of the underlying misinformation.”
A Connecticut appellate court also recently dismissed a defamation claim against NBC under Section 230. The court in Vasquez v. Buhl held that a CNBC website was not liable for merely linking to allegedly defamatory content, even though the text of the link — to an article written by third party financial reporter Teri Buhl — “endorsed” the article by stating “I don’t want to steal Buhl’s thunder, so click on the report for the big reveal.” The court rejected plaintiff’s argument that NBC forfeited Section 230’s protection because Buhl did not “provide” the content to NBC but rather NBC found, linked to and endorsed it. Distinguishing recent opinions finding Section 230 inapplicable, the appellate court explained that NBC’s after the fact endorsement that did not “develop” the offending content:
The plaintiff has not alleged any actions, individually or in combination, from which to conclude that the defendant ‘‘materially contributed,’’ ‘‘prompted,’’ ‘‘specifically encouraged,’’ ‘‘apparently requested,’’ or ‘‘actively solicited’’ the defamatory statements in Buhl’s articles. Rather, the actions alleged by the plaintiff are fairly characterized by him to have ‘‘amplified,’’ ‘‘endorsed,’’ and ‘‘adopted’’ those statements.
The court, however, included a lengthy footnote discussing the potential for abuse of expansive Section 230 immunity and questioning whether “the main policy reasons underlying the original enactment of §230 remain relevant,” but concluded that its “hands are tied” until Congress amends the statute.
While no amendment appears to be on the horizon, custom domain names being issued by the Internet Corporation for Assigned Names and Numbers (ICANN) may further test Section 230’s scope. Sen. Jay Rockefeller recently wrote to ICANN to express concerns that the domain “dot-sucks” will be used to shake down companies to purchase “[companyname].sucks” domains to preempt defamatory gripe sites. Although Vasquez held that endorsing already existing third party content in the context of a hyperlink has no effect on Section 230 immunity, some courts have held that prompting or encouraging users to post unlawful content runs afoul of Section 230. Assuming custom domains like dot-sucks (or dot-gripe, another custom domain) are approved by ICANN, litigants may allege that the operators of such sites forfeit their Section 230 protection by soliciting defamation.
After some recent defensive victories that tested the limits of its immunity under the Communications Decency Act, the popular review site Yelp has gone on offense, suing a law firm for using its employees to post fake reviews on Yelp’s sites.
The lawsuit alleges that Yelp checked court records to confirm that the posters were not clients of McMillan Law Group as they claimed. Moreover, Yelp alleges that the posts were created from an IP address linked to the law firm and that, in addition to posting its own fake reviews, the firm “participated in a circle of San Diego lawyers who trade positive reviews.”
One might then ask why Yelp targeted this particular law firm. The firm suspects that the suit was in retaliation for its own recent victory in a small claims lawsuit against Yelp, which reportedly alleged that Yelp failed to deliver the results it promised when the firm agreed to purchase advertising. The small claims court’s ruling was later vacated (days after Yelp sued the law firm) because the matter should have been arbitrated.
Regardless of its motives, and even assuming its Terms of Service create an enforceable contract, or that Yelp has standing to allege unfair competition claims, Yelp may face an uphill battle establishing that it suffered damages as a result of the law firm’s alleged conduct.
Although it is uncertain whether Yelp will continue this practice of suing posters suspected of abusing their account privileges, posters of false Yelp reviews also risk being sued for defamation. A recent appellate court opinion from California in the case Sanders v. Walsh affirmed a judgment in favor of Cheryl Sanders, daughter of Barbara Sanders, a cancer patient who had returned a wig she bought from Walsh’s company, Wiggin Out Salons. Continue reading