Advertising

Backpage.com v. Hoffman, et al.

Date: 

06/26/2013

Threat Type: 

Legislation

Party Receiving Legal Threat: 

Backpage.com, Internet Archive

Type of Party: 

Government

Type of Party: 

Intermediary

Court Type: 

Federal

Court Name: 

United States District Court for the District of New Jersey

Case Number: 

2:13-CV-03952

Legal Counsel: 

For Backpage.com: Bruce S. Rosen (McCusker, Anselmi, Rosen & Carvelli, PC). For Internet Archive: Frank L. Corrado (Barry, Corrado, Grassi, &Gibson, PC)

Publication Medium: 

Website

Relevant Documents: 

Status: 

Pending

Disposition: 

Injunction Issued

Description: 

On May 6, 2013, New Jersey Governor Chris Christie signed P.L. 2013, c.51 § 12 (Bill A3352) into law, which was to be codified as N.J.S.A. § 2C:13-1O and take effect July 1, 2013. The New Jersey law would criminalize "advertising commercial sexual abuse of a minor," which a person commits if he "knowingly publishes, disseminates, or displays, or causes directly or indirectly, to be published, disseminated, or displayed, any advertisement for a commercial sex act, which is to take place in this State and which includes the depiction of a minor" or "knowingly purchases advertising in this State for a commercial sex act which includes the depiction of a minor." The bill requires a minimum fine of $25,000 for a person convicted of this crime.

On June 26, 2013, Backpage.com, a classified advertising website with a section for adult ads, filed suit in the federal district court of the District of New Jersey against New Jersey Attorney General John Hoffman and prosecutors from each of the state's 21 counties. In the complaint, Backpage.com -- pursuant to 42 U.S.C. § 1983 -- sought a temporary restraining order to enjoin the enforcement of the law, asserting that it violated Section 230 of the Communications Decency Act, the First Amendment, the Fourteenth Amendment, and the Commerce Clause.

Specifically, Backpage.com asserted that:

  • Bill A3352 was preempted by and violated Section 230 of the Communications Decency Act, under which Backpage.com was considered an "interactive computer service."
  • The bill was unconstitutional under the First Amendment because it was a content-based restriction that was overbroad and vague.
  • The bill was also invalid under the First and Fourteenth Amendments because "it purport[ed] to impose strict criminal liability on online service providers such as Backpage.com and others for third-party content, in the absence of proof of scienter, particularly concerning knowledge of the age of any individual depicted in such content."
  • The bill violated the Commerce Clause because it attempted to regulate commercial transactions that took place wholly outside of New Jersey. 

In the complaint, Backpage.com sought declaratory judgment, preliminary and permanent injunctions against enforcing the law, and attorney's fees.

On June 28, 2013, Hoffman, on behalf of himself and the other defendants, filed a response to the demand for a temporary restraining or that argued Backpage.com's claims could not satisfy the necessary elements for granting such an order. The defendants claimed that the New Jersey provision did not conflict with Section 230, allowing the two to coexist. They argued that because the challenged statute prohibits the advertisement of an illegal transaction -- commercial sex acts with minors -- it was categorically excluded from First Amendment protection. Further, they claimed that the provision was not overbroad because it did not broadly prohibit references to sex, but rather was directed solely at offers to engage in an illegal transaction. The response stated that the public interest in protecting children was "overwhelmingly" in favor of allowing the statute to become effective.

On June 28, 2013, after a hearing on the motion, the court granted a temporary restraining order against the enforcement of the law, stating that the plaintiff had satisfied the necessary elements. On July 8, the court ordered that a similar action, filed on June 26 by Internet Archive against the same defendants, would be consolidated with this case. 

An oral argument is scheduled for August 9, 2013.

Jurisdiction: 

Subject Area: 

Pinterest: Fair Use of Images, Building Communities, Fan Pages, Copyright

When using Pinterest (and Flickr and YouTube and Facebook and on and on), what copyright, fair use, trademark and other issues weigh on building communities and corporate use of fan pages and social media generally?  A hypothetical “Company” has plans for its Pinterest “community”, and in particular, wonders about these situations:

  • Using Images of Identifiable People
  • Fair Use and Images
  • Trademarks: When is a “Fair Use” Argument Strongest?
  • Why Attribution and Linking to Original Sources is Important

3 introductory questions:

Question #1: Someone used to be a paid Company sponsor or spokesperson.  They are no longer.  Can the Company continue to post a photo of the old sponsor to Pinterest? Short Answer: If the contract with the sponsor expressly permits it, yes.  Ordinarily, the contract would specify engagement for limited time, and that would prohibit rights to use images beyond the contract period.  But it really depends on what the contract says.

Question #2: Can the Company post a photo of a fan of the Company? Short Answer: Express consent is required, either through a release or the fan’s agreement (whenever the photo is submitted) to terms of service.  Exceptions are discussed below.

Question #3: Can the Company post a photo of a Coca-Cola bottle on its Pinterest page? Short Answer: If the use of the image does not suggest (implicitly or explicitly) endorsement or association, then yes.

Subject Area: 

Jurisdiction: 

Hoang v. Amazon.com, Inc.

Date: 

10/13/2011

Threat Type: 

Lawsuit

Party Receiving Legal Threat: 

Amazon.com, Inc., IMDb.com, Inc.

Type of Party: 

Individual

Type of Party: 

Large Organization

Court Type: 

Federal

Court Name: 

Western District of Washington at Seattle

Case Number: 

2:11-CV-01709-MJP

Legal Counsel: 

Ashley A. Locke, Breena Michelle Roos, Charles Christian Sipos, Elizabeth L. McDougall-Tural

Publication Medium: 

Website

Relevant Documents: 

Status: 

Pending

Disposition: 

Dismissed (partial)

Description: 

Junie Hoang, the stage name of Asian actress Huong Huang, filed an anonymous "Jane Doe" complaint in the Western District of Washington against the Internet Movie Database website, IMDb.com, and its parent company, Amazon.com, on October 13, 2011.

Hoang, who lives in Texas, has been a user of IMDb.com since 2003 and a subscriber to IMDbPro since 2008. She was using the services to help her connect with casting directors and to obtain acting roles. She did not put her age in her profile, but alleges that IMDb.com included it at a later point in time. She alleges that IMDb.com "took the personal information she provided during the subscription process [from her credit card] and added it to her online profile without her authorization." She also alleges that IMDb.com "scour[ed] public records" to discover her date of birth. She asked for her birthdate to be taken down, but IMDb.com has refused.

Hoang alleges that revealing her true name and age on IMDb.com has harmed her career because "in the entertainment industry, youth is king." Hoang was 40 years old at the time of filing. In addition, she alleges a "double-whammy effect" because she cannot get "forty-year-old roles" because she looks younger than she is and cannot portray the role of a forty-year-old woman.

In her complaint, Hoang alleges four causes of action:

  1. Breach of contract (of IMDbPro's Subscriber Agreement and incorporated Privacy Policy);  
  2. Fraud;
  3. Violation of Washington Privacy Act, RCW 9.73.030; and
  4. Violation of Washington Consumer Protection Act, RCW 19.86.

She included Amazon.com in her complaint because she alleges that the company "aided and abetted IMDb's wrongful conduct," and was aware of IMDb's procedures of cross-referencing credit card information with public records to gather as much information as possible about each subscriber. She sought an injunction to remove her personal information from IMDb, as well as $75,000 in comensatory damages, $1 million in punitive damages, and an award of costs and fees.

On November 9, 2011, defendants responded with two Motions to Dismiss: one pursuant to Rule 12(b)(6), failure to state a claim; and another pursuant to Rule 10(a), arguing that "Jane Doe" should not be able to proceed anyonymously. On the Rule 12(b)(6) motion, Amazon and IMDb argued that the display of the birthdate was "an accurate fact," and that Doe's claims about IMDb's practices were "pure speculation." The defendants also noted that even if Doe's claims were true, "plaintiff consented to such use of information when she subscribed to the IMDbPro service." 

On November 28, 2011, plaintiff filed oppositions to defendant's Rule 12 (b)(6) motion and Rule 10(a) motion, and simultaneously filed a cross-motion to proceed anonymously due to the "unique circumstances" in the case. Plaintiff argued that she should be allowed to proceed anonymously because disclosure of her identity would subject her to "severe retaliation, harassment and ridicule," including retaliation by defendants, who she claims "have a reputation of striking back at consumers who complain about their unauthorized publication of personal information." 

Defendants filed replies in support of their motions on December 2, 2011. They argued in regards to the 12(b)(6) motion that the plaintiff had failed to meet her burden of specific factual allegations sufficent to state a claim, and that each of her causes of action fail independently. In their reply pursuant to the 10(a) motion, defendants argued that plaintiff's arguments did not justify anonymity in this case, while also denying that they had ever "retaliated against [p]laintiff (or anyone else) for complaining regarding its practices." Amazon also claimed that "embarrassment does not meet the strict standards for anonymity." 

On December 23, 2011, the Washington district court judge in Seattle granted the defendant's motion to dismiss on Rule 10(a) grounds.  The court said "the injury [plaintiff] fears is not severe enough to justify permitting her to proceed anonymously. " The judge granted leave to "Jane Doe" to amend her complaint by adding her real name within 14 days of the order. 

On January 6, 2012, "Jane Doe" filed an amended complaint using her real name, Huong Huang.

On March 30, 2012, a federal district court judge ruled on the Rule 12(b)(6) Motion to Dismiss. Taking plaintiff's factual allegations as true, the court granted in part and denied in part defendants' motion.

  1. Breach of Contract. The court held that Huang's breach of contract claim was sufficient to survive the motion to dismiss stage. Plaintiff alleged an existence of a contractual duty and a breach of that duty. The court said the "plain language of the contract does not permit defendants unfettered use of the personal information that Plaintiff provided for the purposes of processing payment."
  2. Fraud. In regards to the fraud claim, the court held that Huang's claim failed because it did not meet the high standard of specificity requirements of Rule 9(b). This claim was dismissed with leave to amend with "the requisite standard of particularity."
  3. Washington's Privacy Act. Plaintiff's privacy claim also failed because it misapplied the Washington statute. The information was not "private" and was not "intercepted" or "recorded" by defendants, as required by the statute.  This claim was dismissed with prejudice.
  4. Washington's Consumer Protection Act. The Consumer Protection Act claim was also allowed to survive at the motion to dismiss stage. The court found that "defendants' alleged practices" could affect millions of people if plaintiff's allegations of IMDb.com's unfair and deceptive practices are true. 

On April 25, 2012, Huang filed a Second Amended Complaint (SAC), addressing the specificity in her fraud claim. In her SAC, Huang argues that defendants were engaged in data-mining, and that they "materially misrepresent...the safety, security and purposes for which they gather and use the personal and credit card information of consumers who subscribe to IMDbPro." She claims she would not have shared her credit card information if she knew the defendants would use "such information for other purposes." (The plaintiff and defendants disagree as to which documents represent the operative agreements in this matter.) Huang also adds a new claim about Amazon.com. She alleges that she purchased products from Amazon.com prior to subscribing to IMDbPro and  that "Amazon.com misrepresented in the Privacy agreement available on its website the terms on which Amazon.com would share her user information with IMDb.com."

After Huang filed her second amended complaint, defendants filed another Motion to Dismiss pursuant to Rules 12(b)(6) and 9(b) on May 9, 2012. In it, defendants argue that plaintiff's new claim about Amazon.com's Privacy Notice is a "thinly veiled attempt to keep Amazon.com in this lawsuit." Defendants also argue that plaintiff's SAC "comingles" defendants and fails to distinguish between Amazon.com and IMDb.com, as required for a state claim for fraud. They claim that plaintiff still does not specify "which statements are false, which statements IMDB.com knew were false and intended plaintiff to rely on, and which statements she had a right to rely on."  

Huang filed an opposition to the Motion on May 21, 2012, and defendants replied to the opposition on May 25, 2012.

On June 1, 2012, Huang filed a Motion for Relief from Trial Deadlines and to Continue Trial Dealines alleging defendants did not file substantial answers to her complaint and/or raise substantial defenses. The plaintiff also claims both parties have been "embroiled" in discovery disputes because Amazon claims to be exempt from full discovery. Defendants filed an Opposition to that motion on June 13, 2012, alleging that plaintiff was delaying her own responses to discovery and had failed to respond to efforts to negotiate a "mutally acceptable protective order." On June 15, 2012, Huang filed a Reply in support of her Motion for Relief from Trial Deadlines and to Continue Trial Date.  

The plaintiff and defendants asked the Court to enter a Stipulated Protective Order regarding discovery on June 28, 2012. 

 

Content Type: 

Subject Area: 

Jurisdiction: 

Does Washington State's SB 6251 Require Online Classified Sites to Monitor All Third-Party Content?

The trafficking of children for sex in the United States is an appalling and very real problem, which a new Washington state law means to eliminate by targeting websites that offer classified advertising for escort services. But many fear the law poses a serious threat to free speech on the Internet by imposing upon online service providers the burdensome duty to monitor, vet, and otherwise censor third-party content.

Subject Area: 

Jurisdiction: 

Fraley v. Facebook

Date: 

03/18/2011

Threat Type: 

Lawsuit

Party Receiving Legal Threat: 

Facebook, Inc.

Type of Party: 

Individual

Type of Party: 

Large Organization

Court Type: 

Federal

Court Name: 

U.S. District Court, Northern District of California (removed from California Superior Court, Santa Clara County)

Case Number: 

5:11-cv-01726-LHK (subsequently 3:11-cv-01726-RS, after reassignment)

Legal Counsel: 

Cooley LLP (Michael G. Rhodes, Matthew D. Brown, Jeffrey M. Gutin)

Publication Medium: 

Social Network

Relevant Documents: 

Status: 

Pending

Description: 

On March 18, 2011, five plaintiffs (including two minors) sued Facebook in California state court. The plaintiffs claimed to represent the class of people injured by Facebook's introduction of a "Sponsored Story" system, through which Facebook turns certain types of user behavior (such as "liking" a company) into paid advertisements that include the user's name and/or picture.

The first amended complaint alleged three causes of action: (1) Facebook violated California's right of publicity statute, which protects against misappropriation of a person's identity for monetary gain; (2) the Sponsored Stories, being unlawful, fraudulent, and unfair, violated California's unfair competition law; and (3) Facebook's actions constituted unjust enrichment.

After Facebook removed to federal court, the plaintiffs filed a second amended complaint (which alleged the same three causes of action). Facebook then moved to dismiss, arguing that: (1) the plaintiffs lacked standing because they had failed to allege any actual monetary/commercial injury (because their names/likenesses lacked commercial value); (2) CDA § 230 protected Facebook because the Sponsored Stories constituted mere "editorial functions"; (3) Facebook's actions fell within the right of publicity law's exception for "newsworthy" content; (4) the unfair competition claims failed because Facebook does not charge its users; and (5) California does not recognize an unjust enrichment claim.

After the parties exchanged memoranda on the motion to dismiss, on December 16 the judge ruled in favor of the plaintiffs, with the exception of dismissing the unjust enrichment claim.

The court (Koh, J.) first rejected Facebook's standing and § 230 arguments. With respect to the standing issue, the court found that alleging a violation of the California statute constituted a concrete and particularized injury. The court rejected Facebook's § 230 claim because (according to the complaint) Facebook creates, at least in part, the Sponsored Stories, and such actions go above and beyond mere editorial functions.

With respect to the right of publicity claim, Facebook argued that the Sponsored Stories were "newsworthy" within the meaning of the statute because users are "public figures to their friends." The court disagreed, holding that the newsworthiness exemption does not apply to "commercial rather than journalistic" uses. The court went on to state, however, that the fact that users might be "celebrities to their friends" was sufficient to establish that the users had commercially exploitable names and likenesses protected under the statute. The court also ruled for the plaintiffs with respect to Facebook's argument that the plaintiffs consented to the Sponsored Stories by agreement to Facebook's terms of service, and ruled that Facebook's profiting from the Sponsored Stories sufficed to show actual damages (at least at the motion to dismiss stage).

The court rejected Facebook's challenge to the unfair competition claim, but dismissed the unjust enrichment claim, holding that unjust enrichment is not an independent cause of action in California but only a remedy or measure of damages on another claim. Thus, the main thrust of the plaintiffs' complaint remained: both the right of publicity and the unfair competition claims survived, while the independent unjust enrichment claim was dismissed.

Updates:

1/9/2012: Facebook answers the plaintiffs' second amended complaint.

3/16/2012: Facebook files a motion to consider relating a second civil action arising out of allegedly similar facts, E.K.D. v. Facebook, Inc. (a.k.a. C.M.D. v. Facebook, Inc.), No. 12-cv-01216. The second case involved, inter alia, allegations that Facebook was using the names and likenesses of minors who were incapable of giving consent under California law. The plaintiffs opposed the motion, raising concerns about delaying proceedings in Fraley. On March 21, 2012, Judge Koh allowed the motion and related the second case, directing that it to be assigned to her, but refused to consolidate the second case with Fraley because of the delays that would result.

3/29/2012: The plaintiffs file a motion to certify the class, which Facebook opposes. This motion is not acted upon by the Court for another four months (see entry below for 8/1/2012).

6/12/2012: The plaintiffs file a motion for preliminary approval of a class action settlement reached with Facebook and certify the class for settlement. (Only a redacted version of this document was originally available; an unredacted version was made available to the public on September 4, 2012.)  Among other things, the proposed settlement would require Facebook (1) to provide expanded notice to its users that they consent to use of their names and likenesses in Sponsored Stories advertisements, and requiring additional provisions obtaining consent from the parents or legal guardians of users under 18, (2) to pay up to $10,300,000 in attorneys' fees and costs, and (3) to distribute $10,000,000 to cy pres recipients nominated by the parties.  The proposed cy pres recipients include the Joan Ganz Cooney Center, the Center for Democracy and Technology, the Electronic Frontier Foundation, the MacArthur Foundation, the Campaign for Commercial-Free Childhood, the Consumers Federation of America, Consumers Union, the Berkeley Center for Law and Technology, the Center for Internet and Society at Stanford Law School, the Information Law Institute, the High Tech Law Institute, the Berkman Center for Internet and Society, the Consumer Privacy Rights Fund, Connect Safely, and Wired Safety.  [Disclosure: the Citizen Media Law Project is a project of, and hosted at, the Berkman Center for Internet & Society.]

6/22/2012: The plaintiffs in the related action move to intervene and to oppose the proposed class action settlement with Facebook, arguing that specific issues in the second case relating to the use of the names and likenesses of minors made it inappropriate to certify the plaintiffs in the related case as part of the settlement class. Both the plaintiffs in Fraley and Facebook opposed the motion to intervene, and the plaintiffs in the related case filed a reply brief.

7/3/2012: An individual claiming to be part of the settlement class files a pro se motion requesting that the Court add certain charities to the cy pres settlement.

7/11/2012: The Center for Public Interest Law and the Children's Advocacy Institute file an amicus curiae brief in opposition to the proposed settlement, arguing that the proposal does not protect minors in California in accordance with California law, and that the stipulated attorneys fees are excessive in light of the fact that the members of the class would receive no compensation.

On the same date, Judge Koh recused herself from the Fraley case without specific explanation. In a separate order, she clarified that she would nevertheless retain the related case,  C.M.D. v. Facebook, Inc., No. 12-cv-01216. The Fraley case is subsequently assigned to U.S. District Judge Richard Seeborg.

7/25/2012: The Court (Seeborg, J.) denies the motion of the plaintiffs in the related action to intervene as moot, stating that their motion to intervene itself raised the objections that they wished to raise, but granting them the right to argue in opposition to preliminary approval of the class settlement at a hearing scheduled for August 2, 2012. The Court also noted that, as putative members of the class in Fraley, they would also have standing to submit written objections and appear at a hearing on final approval if preliminary approval were granted.

8/1/2012: The Court issues an order on several pending matters, including: (1) denying without prejudice the plaintiffs' 3/29/2012 motion to certify the class, in order to take it off the court's calendar while settlement is pending; and (2) denying the 7/3/2012 motion to expand the list of proposed cy pres recipients.

On the same date, Facebook filed a brief in response to the 7/11/2012 amicus brief from the Center for Public Interest Law and the Children's Advocacy Institute.

8/2/2012: The Court holds a hearing on preliminary approval of the class action settlement, which is taken under advisement.

On the same date, the Electronic Privacy Information Center, the Center for Digital Democracy, Consumer Watchdog, the Privacy Rights Clearinghouse, and a group of privacy-oriented parties file letters with the Court opposing the settlement as insufficient and/or seeking to add additional privacy-oriented organizations to the list of cy pres recipients.

8/17/2012: The Court denies the motion for preliminary approval of the class action settlement, without prejudice, stating that there are "sufficient questions regarding the proposed settlement that it would not be appropriate simply to grant the motion and postpone resolution of those issues to final approval[.]" Among other issues, the Court questioned (1) whether the size of the class is a sufficient justification for monetary relief limited to cy pres payments, (2) whether the $10 million in cy pres payments was an adequate proxy for an award of damages, (3) whether the $10 million figure for payment of attorneys' fees was appropriate, and (4) the specific nature of the injunctive relief that would be granted against Facebook. The Court directed that the parties respond directly to these issues on any renewed motion for approval of the class action settlement. 

8/31/2012: Facebook's brief in support of the motion for preliminary approval of the settlement rejected by the court is docketed. The brief asserted in support of the settlement that the plaintiffs' likelihood of success in the litigation is low based upon a wide range of defenses asserted by Facebook, including:

  • that Facebook's users consented, impliedly or expressly, to appear in Sponsored Content;
  • that plaintiffs cannot prove economic injury, or that such injury is de minimis;
  • that plaintiffs cannot base claims upon Sponsored Content that does not feature names or identifiable photographs, that is unrelated to "products, merchandise, goods or services," or that promotes news, public affairs, sports, political campaigns and other matters in the public interest;
  • that Facebook's republication of user comments was protected by the First Amendment and/or immunized by 47 U.S.C. s. 230; and
  • that the plaintiffs cannot establish that any of Facebook's conduct was unfair or fraudulent under California's unfair competition law.

As a result, Facebook argued that the proposed settlement provided concrete and immediate benefits to users that address the goals of the lawsuit, in a manner that was fair when balanced against the plaintiffs' likelihood of success and the extended effort that would be required to reach an uncertain result.

10/5/2012: The parties submit a proposed Amended Settlement Agreement and Release to the Court. According to the revised agreement, Facebook would commit to the following actions providing relief to the plaintiff class within six months of a final settlement:

  • revision to its Terms of Use to provide improved notice with respect to the Sponsored Stories program;
  • creation of a mechanism allowing users to view those aspects of their interactions and content on Facebook that have been displayed in Sponsored Stories, and to control which of these interactions and content are used in Sponsored Stories;
  • controls that allow parents to prevent the use of minors' names and likenesses in Sponsored Stories, and an automatic block of such use for minors who state that their parents do not use Facebook;
  • additional information for parents about how advertising works on Facebook; and
  • good faith efforts to cooperate with plaintiffs' counsel to identify and to correct information appearing on Facebook that incorrectly or insufficiently describes how advertising on Facebook works.

In addition, Facebook would agree to pay twenty million dollars ($20,000,000) into a settlement fund. From this settlement fund, authorized claimants from the plaintiff class would be entitled to a one-time payment of $10 each, with the remainder distributed to cy pres recipients on the following schedule: Center for Democracy and Technology (10% of cy pres distribution), Electronic Frontier Foundation (10%), MacArthur Foundation (10%), Joan Ganz Cooney Center (10%), Berkman Center for Internet and Society (Harvard Law School) (6%), Information Law Institute (NYU Law School) (6%), Berkeley Center for Law and Technology (Berkeley Law School) (6%), Center for Internet and Society (Stanford Law School) (6%), High Tech Law Institute (Santa Clara University School of Law) (6%), Campaign for Commercial-Free Childhood (6%), Consumers Federation of America (6%), Consumer Privacy Rights Fund (6%), ConnectSafely.org (6%), and WiredSafety.org (6%).

However, if payment of $10 to each authorized claimant would exhaust the settlement fund, the proceeds of the fund would be distributed to authorized claimants pro rata -- unless the proceeds to each claimant would be less than $5, in which case the Court would have the discretion to order either that (A) the pro rata amount be paid to claimants or (B) the entire settlement fund be paid to the cy pres recipients in the amounts set forth above.

Plaintiffs' counsel would also be entitled to file a motion for payment of their reasonable attorneys' fees and costs out of the settlement fund, and the named plaintiffs would be entitled to payment of no more than $12,500 each out of the settlement fund as an incentive award for their participation in the case. The Court would retain discretion with respect to attorneys' fees and incentive awards, and a decision not to approve fees or incentives in any particular amount (or at all) would not affect the settlement. Any attorneys' fees or incentive awards would be deducted from the settlement fund before payments to members of the class are calculated, as would any costs of administrating the settlement fund.

10/25/2012: Facebook files a memorandum in support (only redacted version available) of the parties' joint motion for approval of the revised settlement, arguing that the settlement is fair in light of the plaintiffs' likelihood of success.

11/15/2012: The Center for Public Interest Law and the Children's Advocacy Institute file an updated amicus memorandum in opposition to the amended settlement, raising, inter alia, concerns about the opt-out (as opposed to opt-in) mechanism for parental consent proposed by the new settlement, the capacity of minors to agree to Facebook's terms of service, the ability of plaintiffs' counsel to adequately represent the interests of minors, and the risk of depletion of settlement funds through excessive attorneys' fees.

12/03/2012: The Court grants preliminary approval of the amended settlement agreement, stating that "[t]he Settlement Agreement appears to be the product of serious, informed, noncollusive negotiations and falls within the range of possible approval as fair, reasonable and adequate."

Content Type: 

Subject Area: 

Priority: 

2-Normal

CMLP Notes: 

1/3/2011: In Progress; all docs collected, need to pull together summary. (JS)

Jurisdiction: 

Jurisdiction: 

Can CAN SPAM Apply to Social Media? Yes It Can.

The regulation of commercial speech on social media sites continues to increase. In late March, a federal court in California held that Facebook postings fit within the definition of "commercial electronic mail message" under the Controlling the Assault of Non-Solicited Pornography and Marketing Act ("CAN-SPAM Act;" 15 U.S.C. § 7701, et seq.).

Subject Area: 

Jurisdiction: 

U.K. Extends Consumer Disclosure Laws Online, As In U.S.

The Office of Fair Trading, the British equivalent of the United States Federal Trade Commission, has determined that the hiring of bloggers and other social media contributors to promote particular products without adequate disclosure of the relationship may violate U.K. consumer protection laws. Handpicked Media Ltd (Handpicked Media), Case Ref. CRE-E-25932 (OFT Dec. 13, 2010).

Subject Area: 

Jurisdiction: 

FTC Flexes Blogger Rules Again

The Federal Trade Commission has reached a second settlement with a marketer over apparent violations of the Commission's rules requiring disclosure of compensated endorsements, particularly on blogs and social media, as well as other contexts in which the compensation (which may include free samples or discounts) is not "reasonably expected by the audience."

Subject Area: 

Jurisdiction: 

FTC Seeks to Clarify -- and Justify -- Its Blogger Endorsement Guidelines

The Federal Trade Commission recently issued a factsheet in response to questions it received about its revised guidelines requiring disclosure of compensated endorsements.

Subject Area: 

Jurisdiction: 

Yaldo v. Doe

Threat Type: 

Lawsuit

Date: 

12/10/2009

Party Receiving Legal Threat: 

John Doe

Type of Party: 

Individual

Type of Party: 

Individual

Court Type: 

Federal

Court Name: 

United States District Court, Eastern District Michigan

Case Number: 

2:10-cv-11886-JCO-MJH

Relevant Documents: 

Status: 

Pending

Description: 

On May 10, 2010, Dr. Mazin K. Yaldo filed a lawsuit in federal district court against an unnamed Doe defendant, asserting claims for false light ant federal and state trademark infringement and unfair competition.  The claims were based on a Google AdWords campaign that used Plaintiff's trademark YALDO EYE CENTER to trigger an ad with the headline "Yaldo Eye Center Bankrupt" and the text "What you should know before considering yaldo" next to the URL "www.crainsdetroit.com" (a website that reports on local businesses in the Detroit area).  The link redirects to an article on the Crain's Detroit Business website titled "Eye surgery centers declare bankruptcy," which reported that "[f]ive companies headed by ophthalmologist and eye surgeon Dr. Mazin Yaldo have filed for Chapter 11 bankruptcy protection." 

According to the Complaint, Defendant purchased the keywords "Yaldo Eye Center," "Dr. Mazin Yaldo," "Dr. Yaldo," and "Mazin Yaldo" through the Google AdWords program.  The Complaint alleges that "Defendant's advertising is deliberately designed to cause consumers to believe that the advertisement was sponsored by Crain's Detroit Business and that the apparent warning is coming from a credible news source rather than Defendant," and that Defendant's acts were done "with the intent of urging consumers to reconsider their choice of vision correction services."  (Complaint ¶¶ 22-23)  Plaintiff further asserts that the advertisements are misleading, because they "deceiv[e] consumers. . . into believing that Crain's Detroit Business is offering a warning about the quality of services offered by Dr. Mazin Yaldo and or the Yaldo Eye Center." (Complaint ¶ 40)

According to the Complaint, Plaintiff complained to Google about the use of the YALDO EYE CENTER mark in the Google AdWords result, and Defendant subsequently modified the language of the advertisement to read "Yaldo LASIK Bankrupt," and "What You Should Know Before Considering Yaldo LASIK." (Complaint ¶¶ 29-31) 

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Jurisdiction: 

FTC Endorsement Rules Get Their First Workout

The Federal Trade Commission has announced that it has completed its first investigation under the "blog-ola" rules it adopted last year, which require bloggers and other social media posters who receive a free or discounted product or service to disclose the freebie in their reviews or commentary about the product or service, or face the possibility of an FTC enforcement action.  See "Guides Concerning the Use of En

Subject Area: 

Google's "Oprah" Moment, Gwyneth Paltrow's Rave, and Two Tests for FTC's Endorsement Guides

It could have been a moment right out of The Oprah Winfrey Show.  But instead of the entire audience getting Pontiac G6s (click here for a fun mash-up video of that big event), all the reporters attending the unveiling of Google's new Nexus One mobile phone on January 5 were given a special offer: they could get one of the phones for free, or to opt for a free, 30-day trial, after which the phone will be returned (loan agreement). (The free offer is mentioned in the 1:55 p.m. posting on this Wall Street Journal live blog of the press conference.)  It appears that some other reporters who were not at the event also got the phones.

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CMLP Publishes New Guide to FTC Disclosure Requirements for Product Endorsements

As part of our legal guide series on Risks Associated with Publication, today CMLP published a guide to Publishing Product or Service Endorsements

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Some Gray Areas Surrounding the FTC's Disclosure Requirements

On this page, we look at some areas where it is not entirely clear how the FTC's Guidelines will apply to online publishing activities:

The Occasional Freebie. Perhaps the most troubling gray area is whether you have to disclose your "relationship" with a company that sends you a freebie once in a while in anticipation of your writing a review about it, but with whom you have no other formal ties. It is not clear how the FTC will deal with this situation.

Complying With the FTC's Disclosure Requirements

If you have a relationship with a company that needs to be disclosed, then you should do so in a "clear and conspicuous" manner. Don't put it in small print or hide it away on a backwater page on your website. You want readers to easily notice the disclosure, and you want them to understand it. So make the disclosure clear and unambiguous so it can be understood by the average reader.

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