Gawker Remains in the Crosshairs: Seventh Circuit Finds that Online Media Publisher Can Be Liable for Defamatory Third-Party User Comments for Its Role in Disseminating the Statements

The Seventh Circuit Court of Appeals recently kept alive one of the multitude of legal entanglements ensnaring Gawker Media LLC, as the Court reversed and remanded a lower court’s decision to dismiss a plaintiff’s defamation claim involving defamatory third-party user comments.  In its ruling, the Court emphasized that a media company such as Gawker can be liable for creating and posting (or inducing another to post) defamatory statements in a forum that the company maintains.

The plaintiff in Meanith Huon v. Nick Denton, et al., Case No. 15-3049, is an attorney who was acquitted on charges that he abducted and sexually assaulted a woman in 2010.   Following his acquittal, the plaintiff sued the legal blog Above the Law for $100 million relating to an article published on the blog that suggested that he faced several different criminal rape charges.  Jezebel, a blog owned by Gawker, later posted a story that linked to Above the Law’s coverage.  The plaintiff claimed that Jezebel’s story maintained the false impression that he had actually committed the sexual assault, and Gawker thus was added to the plaintiff’s lawsuit in 2011.

The plaintiff specifically took issue with third-party user comments posted in the comments section following the Jezebel article.  The article generated more than 80 comments from anonymous third-party users, and the plaintiff alleged that Gawker served as an information content provider for those comments by encouraging and inviting users to defame him, shaping the content of the comments, and employing individuals who may have authored some of the comments themselves.

The district court dismissed the plaintiff’s claims against Gawker, finding that the complaint insufficiently pled that Gawker employees had actually authored the comments.  The lower court relied on the Communications Decency Act, which serves to protect online media publishers from liability for third-party comments. Under Section 230 of the Communications Decency Act of 1996, traditional online service providers are not viewed as publishers of “any information provided by another information content provider.”  47 U.S.C. § 230(c)(1).  Even if an online service provider could be considered a “publisher” under traditional defamation law, courts have held that such operators cannot be found liable under Section 230 for defamatory postings by anonymous users, even if the operators maintained some degree of relevant knowledge.  See, e.g., Zeran v. America Online, Inc., 129 F.3d 327 (4th Cir. 1997).

However, in reversing the lower court’s ruling, the appellate panel of Circuit Judges Frank Easterbook and Ann Claire Williams and U.S. District Judge Staci M. Yandle determined that the general “immunity” that protects most online publishers from liability for third-party user comments did not extend to Gawker under the specific facts alleged in this case.  Although a company like Gawker cannot be considered the publisher of information under the Communications Decency Act simply based on its action of hosting an online forum for third-party users to submit comments, the Court reasoned that Gawker’s comments forum in this instance operated as more than a passive conduit for disseminating defamatory statements. The Court held that the plaintiff’s fourth amended complaint devoted more than four pages to detailing Gawker’s alleged activities and suggested that Gawker employees may have anonymously authored comments in an effort to boost traffic to Gawker’s website.  One user comment in particular may qualify as actionable defamation, as the comment clearly and unmistakably accused the plaintiff of committing rape, according to the Court.  Thus, the Court determined that discovery will serve as the proper tool to test the validity of the plaintiff’s allegations relating to Gawker’s involvement in the third-party comment function.  (“The Gawker defendants may well be correct in contending that none of Huon’s various allegations actually occurred, but this doesn’t mean that the allegations are so implausible as to warrant dismissal.”).  Without first engaging in the discovery process, the lower court should not have dismissed the plaintiff’s claims, the Court held.

The Court also found that the lower court improperly dismissed two other claims – false light invasion of privacy and intentional infliction of emotional distress – as a result of the court’s dismissal of the defamation count.

The revival of this defamation lawsuit further muddies the crammed litigation landscape facing Gawker Media.  The notable Hulk Hogan invasion of privacy case, in which the professional wrestler sued Gawker after the website ran an excerpt of one of his sex tapes, resulted in a $130 million judgment for Hogan and against the company.  Gawker filed for Chapter 11 bankruptcy to block Hogan from seizing the company’s assets, and the bankruptcy filing stayed all other litigation against the company.  In June 2016, Politico.com reported that Gawker was fighting at least ten separate lawsuits at the time of the bankruptcy filing.  The New York Times similarly reported that five of those cases were defamation-related lawsuits.   In this case, the Court was notified of the bankruptcy filing following oral argument.  In a footnote, the Court stated that Gawker’s counsel informed the Court that the automatic stays were modified in order to permit the Court to render a decision.

VR/AR in a Real World

In case you have been living under a rock, virtual reality (VR) and its first cousin, augmented reality (AR), have arrived.  The highly publicized and long-awaited head-mounted displays (HMDs), the headsets through which the world of virtual reality can be accessed, have been or will be made available for sale to the public this year, such as Facebook-owned Oculus VR’s Oculus Rift, Samsung’s Gear VR, Sony’s PlayStation VR, HTC’s Vive, etc.  In other words, VR/AR is going mainstream.

Nearly all of the top 10 tech companies, including Apple, Google, Samsung, and Microsoft, have jumped on the VR bandwagon, investing significantly in the space.  Countless players across many different industries, including Marriott, Netflix, Hulu, Birchbox, and Ford, have developed VR “experiences,” seeking to capitalize on the hype.  Indeed, 75% of the 100 companies on Forbes’ World’s Most Valuable Brands list have either developed VR or augmented reality (AR) experiences for their customers or employees, or have invested in developing the technology.[i] Television networks have broadcast sporting events such as the Kentucky Derby, NASCAR, and the NBA live in VR.  The 2016 Sundance and Cannes Film Festivals featured VR short films.  The Coachella music festival provided each 2016 attendee with a custom cardboard VR headset, allowing them to explore the festival grounds and preview performances through the Coachella VR app.  Six Flags debuted the New Revolution, a roller coaster experience during which riders wear a VR headset while riding a roller coaster.  As the foregoing examples demonstrate, VR is the new “it” technology, and “it” is everywhere.

Even in its nascent state, VR is proving to have a multitude of beneficial uses stemming far beyond the gaming industry with which it is most readily associated.  The healthcare industry is using VR to treat human cognitive and behavioral conditions and provide training to medical students.  The real estate and automotive industries are using VR to show properties and cars to potential buyers.  The sports industry uses VR to provide zero-impact training to athletes.  Educators are incorporating the technology into learning tools designed to engage children.  VR is also being utilized for advertising, space exploration, tourism, military and law enforcement purposes, and, naturally, entertainment.

In contrast to the virtual world they exploit, however, the new HMDs, as well as VR/AR in general, raise very real legal issues, especially in the areas of consumer safety, privacy, intellectual property, and First Amendment law.  Most recently, Pokémon Go, which was released to the public on July 6, 2016, has captured so much attention that it borders on mania.[ii] For the uninformed, Pokémon Go is a game that uses the player’s smartphone camera and augmented reality to insert virtual Pokémon (fictitious creatures) into the user’s real world.  The game designates real-world locations, such as buildings and landmarks, as in-game destinations; players are encouraged to walk around their community in order to locate and capture these Pokémon.  Pokémon Go is producing some beneficial effects, such as promoting physical exercise, generating revenue for businesses, and assisting law enforcement in apprehending suspects.  It is also foreshadowing the problems that future VR/AR games and devices may create.

For example, cell-phone-fixated players are walking into the street without looking.  Some are driving while playing the game – indeed, one player crashed into a tree due to playing Pokémon Go while driving.[iii]  Players are also attempting to capture Pokémon located in inappropriate places such as the Holocaust Museum and the 9/11 Memorial.  At least one man’s private residence has been marked by the app as an in-game destination, causing players to congregate outside of his home at all times of the day.[iv]  Armed robbers are using the game to bait unsuspecting players into unpopulated areas.  A teenage girl in Wyoming even discovered a dead body while trying to catch a water Pokémon.[v]  For at least a few days, the app contained a coding “error” that gave the game’s developer “full access” to users’ Google accounts, including Gmail.[vi] Remarkably, all of the foregoing events happened over the course of the first week Pokémon Go was available to the public.  The fact that Pokémon Go became ubiquitous in such a short period of time is a testament to public appetite for VR/AR.

Below, we highlight some prospective issues raised by VR/AR, while recognizing that this discussion is pure conjecture at this point.  The world of VR is still in its infancy, and, as such, these legal issues have not yet been explored in connection with VR.  While we can (and do below) compare VR to other forms of media and technology preceding it, VR is unlike anything before it in terms of the immersive and interactive experience it provides. As such, it is difficult to predict all of the legal implications of this new technology. As HMDs and other VR devices become ubiquitous, these and other issues will come to the forefront and legislation and case law will likely provide answers to many outstanding questions.  Only time will tell us which issues are non-issues and which issues require further regulation, innovation, and attention.

While The “Reality” May Be Simulated, The Potential Legal Issues Are Not

Consumer Safety

While the fully immersive experience of VR is what makes it unique and appealing, it has also spawned perhaps the top (and most obvious) concern regarding VR – the physical risks involved.  It is not difficult to imagine the kind of harm that can ensue when an HMD-user proceeds to move around a room filled with furniture, pets, cords, walls, and other objects while her view of the real world is obstructed.  Injury to both the user and others in the vicinity is foreseeable.  The Internet is filled with reports and videos of HMD users running into walls, furniture, the ceiling, and other people.  The risk of harm is especially high when the user is engaged in a VR experience that encourages moving around (e.g., when the goal is above the user).  It is not only real world objects that can cause the VR user harm, but objects within the virtual space, as well; forgetting that these objects are not real, VR users have attempted to sit or lean on non-existent furniture and are quickly jolted back to reality when they fall onto the very real floor.  If these physical risks actualize and HMDs begin causing serious consumer injuries, a slew of product liability lawsuits will likely emerge claiming that these products suffer from a design defect and/or fail to sufficiently warn of their risks.

It is foreseeable that future plaintiffs will claim that HMDs are defective in design under both strict liability and negligence theories.  But a product does not suffer from a design defect solely because it is dangerous (e.g., a knife).  Like a knife, while the HMD’s design, essentially a high-tech blindfold, certainly presents a risk of danger, it also serves VR’s primary purpose – to fully immerse the user in a virtual experience.  On the other hand, some HMD creators have shown that these products can be made safer with minimal interruption to the immersive VR experience.  Indeed, Valve created a safety mechanism for its HTC Vive called the Chaperone System, which utilizes the Vive’s front-facing camera to detect physical objects in the user’s path.[vii] It also enables users to define the area of the room that they will use and notifies them when they get close to the boundary.[viii]

Unlike the Vive, the first consumer version of the Oculus’ Rift does not come with a Chaperone type system or a front-facing camera.  The Rift, therefore, cannot detect or prevent a user from colliding with physical objects in their path, such as walls, tables, and chairs.[ix]  This raises the question: is an HMD’s lack of a front-facing camera or chaperone system a design defect?  In other words, could Oculus be held liable if a Rift user suffers a physical injury that could have been prevented by the inclusion of a front-facing camera and/or a Chaperone system?  When asked if the Rift can set boundaries to ensure that users do not walk into walls, Oculus’ founder indicated that he believed that to be a software issue rather than a hardware issue.[x]  Interestingly, however, at least one earlier model of the Rift had a front-facing camera.[xi] Further, user reports and videos clearly indicate that Rift users are getting up and walking around, and several users are claiming that the Rift is dangerous and needs a Chaperone system like the Vive.

Oculus could take the position that the doctrine of assumption of risk bars liability for any injury that results from consumers walking around while wearing the Rift.  Oculus could argue that not only is the risk of injury foreseeable, but it specifically warns users of such risks in its health and safety warnings.  Thus, so the argument would go, the consumer assumed the risk of injury because they were aware of it and still used the HMD.  The success of this argument would likely depend on several factors, including the adequacy of Oculus’ health and safety warnings and whether the inclusion of a front-facing camera is economical.

Manufacturers of HMDs may be able to avoid liability for injuries and side effects resulting from HMD usage by providing specific and thorough health and safety warnings.  The health and safety warnings that accompany HMDs already on the market, such as the Rift and Vive, alert consumers to the immersive nature of VR and the risk of serious injury if the product is used in an unsafe area (or if one relies upon imaginary furniture to bear their weight).  These warnings also notify consumers that VR interaction may produce a multitude of negative side effects, ranging from nausea and headaches to seizures and post-traumatic stress disorder.  These types of consumer safety warnings insulated Nintendo from liability in connection with its Wii remotes, and it stands to reason that they will similarly prevent the imposition of liability in connection with VR HMDs.[xii]  Future claims will either confirm the adequacy of such warnings or will test their limits.

Furthermore, since VR only recently made its public introduction, it may involve risks that are not yet known, including the long-term effects of VR usage.  While more research is needed, many believe that long-term VR engagement may have an impact on eyesight, cognition, and behavioral function, especially in children.  Further, there are concerns that the wholly-immersive nature of VR will cause users to develop serious addictions that could lead to death from exhaustion, dehydration or starvation.[xiii]  The threat of addiction to VR does not seem so far-fetched when one considers the severe addictions that users have developed to the significantly less immersive massively multiplayer online games (MMOGs).[xiv]  Oculus warns users to “take at least a 10 to 15 minute break every 30 minutes, even if you don’t think you need it,” but does not specifically mention anything about the threat of addiction.[xv] Warnings may be modified or enhanced to address these and other concerns as they arise, or may be tested in future litigation.  As with all new technology, refinements in both the technology and the business and legal practices surrounding it will continue for as long as the technology is interesting to developers and consumers.

Privacy

Like many mainstream products on the market today, HMDs such as Oculus’ Rift can – and do – collect data about their users.  Unlike other forms of technology, however, the new VR HMDs have an unprecedented ability to collect unique personal information that consumers are not accustomed to providing, namely, physical movement.  Oculus’ privacy policy reveals that the company not only collects information provided by its users, but also automatically collects certain information when a consumer uses Oculus’ services, including “information about your physical movements and dimensions when you use a virtual reality headset.”[xvi]  In addition to user location, Oculus tracks users’ head, hand, and eye movements, and can determine if a user is sitting or standing.  Moreover, the software required to run the Rift includes an internet-connected process that is continuously running and routinely sending information to Facebook’s servers, even when the user is not using the device.[xvii]   In other words, Facebook, through Oculus, knows what content users are viewing on Rift, where they are viewing it, and the positional tracking of the HMD.[xviii]  Concerns over user privacy and security have already been articulated.

Growing concerns over Oculus’ privacy policy caused Senator Al Franken to ask Oculus’ CEO, Brendan Iribe, some hard questions regarding “the company’s collection, storage, and sharing of users’ personal data” to enable consumers to “make informed decisions about whether and with whom they share such sensitive information.”[xix]  Oculus responded that it “collects information about physical dimensions to help improve its services” and admitted that it shares such information with its developers, including Facebook, “as necessary to provide our services and enhance the ability of relevant VR products for people.”[xx] Notably, however, Oculus did not address whether it sells such information to third parties, despite being specifically questioned on the subject.

The unique (and arguably sensitive) information collected through VR products will likely be coveted by advertisers, hackers, and potentially government agencies.  VR companies that collect this data must be careful not to mislead consumers by failing to implement or maintain “reasonable” and “appropriate” controls to secure such information, or by making materially misleading statements or deceptive omissions of material facts to consumers concerning the use, disclosure, or safeguarding of such information (e.g., in a privacy policy or other public-facing materials). Otherwise, they could be subject to enforcement actions by the Federal Trade Commission, as well as litigation brought by consumers for invasion of privacy.

Like other uses of private information, those selling VR products and experiences will be well served by providing clear policies and choices with respect to the information collected.  Responsible safeguarding of private information collected from users will also protect consumers and insulate developers from liability.  No matter what policies and practices are adopted, the trove of information collected from the marketplace of VR users will make a tempting target for hackers and thieves.  In this respect, the emerging VR community will not be breaking new ground; it will merely be joining the ranks of countless other interactive businesses who are entrusted with protecting customer information.  A wide range of businesses, from banking and credit card companies to entertainment and dating services, already struggle to balance the quality of the services and products they provide against the need to protect user privacy.

Intellectual Property

VR may also implicate intellectual property issues where the virtual environment contains real world corporate logos, copyrighted works, or a person’s name or likeness.  As with video games, the laws of copyright, trademark, and right of publicity govern the use of such content in VR.

A copyright owner has the exclusive right to reproduce, distribute, perform, or display the copyrighted work, or to prepare derivative works based on that work.[xxi]  Thus, VR content creators must secure a license from the applicable rights owner before displaying or performing material subject to copyright protection within a VR experience.[xxii]  Likewise, software developers must be cautious when it comes to enabling VR users to generate content (such as avatars).  If users are provided with the means to incorporate protected material into the content they create, software developers may be held secondarily liable for the user’s infringing conduct.

With respect to the use of another’s trademark in VR, solely including another’s mark in VR is not per se trademark infringement.  Rather, the mark’s owner would have to establish the mark was used “in commerce” in order to state a claim for trademark infringement.  For instance, if a VR user sells virtual cars bearing the BMW logo to other VR users, the use of the mark may be found to meet the “in commerce” element of trademark infringement.

Similarly, invoking the name or likeness of a celebrity in VR could amount to an unauthorized use – forming the basis for a right of publicity action – if the use was commercial in nature.  Because right of publicity laws vary from state to state, content providers must take additional care to ensure that use stays within the bounds of the law in every jurisdiction in which the products are distributed.  Addressing this inconsistency is a common issue in the creation of entertainment and other creative content already, and that problem will remain a concern with respect to VR products.

As far as intellectual property issues in the virtual space are concerned, it appears that existing law will apply to protect the intellectual property rights of owners in the virtual world.  If VR content is deemed to be an expressive work, however, as with video games, the First Amendment may provide a defense to future intellectual property lawsuits arising out of the use of a trademark, copyrighted work, or a person’s name or likeness within VR.

First Amendment Issues

Like movies, television, books, and other expressive works before it, VR communicates ideas.  Given that the Supreme Court has held that even violent video games qualify for First Amendment protection,[xxiii]it would seem that, by extension, most VR content should receive First Amendment protection as well.  The highly immersive and interactive nature of VR, however, is encouraging the creation of some content that is less clearly within the protection of the First Amendment.

For instance, the adult film industry is developing X-rated VR experiences that seek to turn pornography into an active experience.  But the less than PG VR uses go far beyond ordinary pornography.  VR users may be able to engage in behavior that is illegal and unacceptable in the real world, such as virtual prostitution, torture, murder and other illegal sexual activities.   This dark side of VR raises many moral and legal questions.  It is foreseeable that legislators will be called upon to regulate VR to preclude user access to some types of experiences, which will surely garner the attention of First Amendment advocates.  VR is lauded by users for the realistic and completely immersive experiences it provides.  For example, users participating in a horror-themed VR experience display palpable signs of fear, signifying that the experience is quite real.  By analogy, performing illegal acts in the virtual, yet life-like world, that one rarely, if ever, gets to perform in the real world would arguably feel even more real to the user and bring the action closer to a real-life crime.  It is unclear whether VR’s incomparable realness and interactivity, coupled with the obscene nature of certain VR content, would render such content outside of the First Amendment’s protective cloak.

Because VR and the new HMDs have only recently gone public, many interesting issues arise as new uses and experiences with VR are created and reported.  The number of products, experiences, and services utilizing VR will certainly continue to explode in the near future as the technology evolves, and so will the legal issues surrounding it.  As with any new technology, some anticipated hurdles will turn out to be non-issues, while other issues may arise and surprise everyone.  With all of the uncertainty surrounding VR, one thing that can be said with confidence is that we have only just begun – and a new world of technology and law lies ahead.

 

But First, Let Me Take A Selfie: The Changing Legal Landscape On Ballot Box Photography

If you take the time to vote in this year’s presidential election – but your ballot is not documented on social media – did you really vote at all?

Many prolific social media users are determined to take ballot box selfies to chronicle their historic votes, but a patchwork of inconsistent state regulations has caused confusion as to whether such snaps violate the law.

However, a series of federal court challenges in recent weeks have spurned some states to change their restrictions on ballot selfies less than a week before Election Day.  In these cases, plaintiffs have contended that the enforcement of ballot box selfie bans is unconstitutional and violates their free speech rights.  In a landmark case on the issue, the U.S. Court of Appeals for the First Circuit in September affirmed a lower court’s ruling that a New Hampshire statute barring ballot selfies served as a content-based restriction of speech in violation of the First Amendment.  The First Circuit held that the statute’s purpose of preventing “new technology from facilitating future vote buying and voter coercion” cannot justify the restrictions it imposed on speech.  See Rideout, et al. v. Gardner, Case No. 15-2021 (1st Cir. Sept. 28, 2016) (link to opinion here).

Even millennial icon Justin Timberlake found himself subject to potential selfie sanctions after the pop star snapped a photo of himself inside a voting booth in Tennessee to promote early voting and then posted the photo along with a message on Instagram.  A new state law in Tennessee prohibits voters in the state “from using the device for telephone conversations, recording, or taking photographs or videos while inside the polling place” and penalties can include 30 days in jail and a $50 jail.  Fortunately, there were no tears for the “Cry Me a River” crooner – a Tennessee newspaper reported last week that the office responsible for investigating Timberlake’s actions would not be prosecuting the matter.

In order to provide Drye Wit readers with some clarity prior to Election Day, this post will examine the current laws governing whether voters are permitted to take pictures of themselves voting along with their actual ballots.  The post also will analyze the growing number of federal court challenges to such selfie bans.

# BY THE NUMBERS

Can you snap a selfie inside a voting booth or not?  The answer depends on where you live.

According to recent data published by the Associated Press (link to article here), ballot selfies are permitted in 19 states and the District of Columbia.  In Rhode Island, for example, the Board of Elections adopted new rules in time for the election allowing voters to take selfies inside polling locations as long as the photos don’t capture another voter’s ballot (similarly, in Utah, it is a misdemeanor to photograph someone else’s ballot but legal for people to snap photos of themselves with their individual ballots).  In Virginia, social media users have free reign, as a formal opinion issued by the state attorney general last month stated that ballot selfies are legal and that voters are not barred from taking photos of themselves, fellow voters, or their ballots.  In some of these 19 states, there are no rules blocking photos in polling places, but clerks and election officials are given wide discretion to implement general policies to “maintain order.”

In eighteen states, ballot selfies are expressly illegal now, although future legislative measures are pending in states like New Jersey (the pending law would allow voters to take photos of their own ballots while in a voting booth). While officials in some of these states (Alaska and Massachusetts) have remarked that they will refrain from practically enforcing such bans, Illinois has perhaps the strictest anti-selfie policy on the books.  According to Illinois law, “knowingly” marking your ballot so another person can see it is a class 4 felony, which is subject to a prison sentence of up to three years.

In the remaining states, guidance is mixed.  In Maryland, while electronic devices are banned inside polling places, photos of mailed ballots are permissible.  In Oklahoma, a state law suggests voting booth photos are illegal, but the law carries no penalties for violations.  In California, Gov. Jerry Brown signed a bill repealing the law barring voters from showing people their completed ballots, but the law doesn’t take effect until January 1, 2017.  In some states, such as Arkansas, a distinction is made between taking photos while in a polling location (which is permissible) and sharing photos of the ballot (guidance is unclear).

# THE FIRST CIRCUIT’S OPINION IN RIDEOUT

In the First Circuit’s decision, a three-judge panel found that banning voters from sharing photographs of their election ballots failed the First Amendment’s intermediate scrutiny test.  The First Circuit first agreed with the district court’s reasoning that the New Hampshire statute under review is “plainly a content-based restriction on speech because it requires regulators to examine the content of the speech to determine whether it includes impermissible subject matter.”  The district court applied strict scrutiny, which requires the government to prove that the restriction in question furthers a compelling interest and is narrowly tailored to achieve that interest.  Although the New Hampshire Secretary of State claimed that the statute was intended to prevent vote buying and voter coercion, the district court reasoned that those interests were only “compelling in the abstract” as no record provided any support for the view that New Hampshire currently suffered from vote buying or voter coercion based on images of completed ballots being posted to social media.

The First Circuit went one step further than the district court in finding that the statute would be considered facially unconstitutional even when applying an intermediate scrutiny standard.  The court found that there is “a substantial mismatch between New Hampshire’s objectives and the ballot-selfie prohibition . . .” and also determined that intermediate scrutiny is not satisfied by the assertion of “abstract” interests.  According to the court, New Hampshire was not able to identify a single complaint of vote buying or intimidation relating to a voter’s publishing a photograph of a marked ballot on social media.  Furthermore, the court found that the statute was not narrowly tailored in that the prohibition on ballot selfies “curtails the speech rights of all voters, not just those motivated to cast a particular vote for illegal reasons.” The First Circuit also recognized that core political speech is an area highly protected by the First Amendment and that a ban on ballot selfies thus would suppress a “large swath of political speech” and limit a voter’s ability to express support for a candidate.

Notably, social media giant Snapchat filed an amicus petition in this case, where it argued that “younger voters participate in the political process and make their voices heard” through the use of ballot selfies (link to Snapchat amicus filing here).  In sum, Snapchat claimed that “[a] ballot selfie – like a campaign button – is a way to express support for or against a cause or candidate.  And because it is tangible proof of how a voter has voted, a ballot selfie is a uniquely powerful form of political expression.  It proves that the voter’s stated political convictions are not just idle talk.”

# OTHER CHANGES PRIOR TO ELECTION DAY?

Buoyed by the First Circuit’s ruling, individuals and organizations such as the ACLU have filed a handful of other requests in federal courts during the last few weeks with the goal of allowing voters to take and share ballot selfies when they go to the polls on November 8.

In California, the ACLU filed a lawsuit on October 31 in federal court in San Francisco, seeking an injunction blocking the state from enforcing its selfie ban (which is only in effect until law AB 1494 takes effect on January 1, 2017).  On November 2, Judge William Alsup of the U.S. District Court of the Northern District of California denied the request, reasoning that the lawsuit was filed too close to the election and any late change would risk confusing voters.

In New York, a lawsuit filed on October 27 contended that a state election law forbidding voters from sharing photographs of their completed ballots through social media violates their freedom of speech rights.  In New York, ballot selfies are a misdemeanor subject to fines of up to $1,000 and one year in prison.  U.S. District Judge P. Kevin Castel held oral argument on November 1, with plaintiffs requesting that the court find the statute to be unconstitutional. The judge reserved decision and said he would rule on the request by the end of the week.

A federal court challenge is also underway in Colorado.  In Michigan, U.S. District Court Judge Janet Neff ruled on October 24 that the state’s prohibition of ballot selfies violated the First Amendment, but the Secretary of State’s Office filed a motion intending to appeal the ruling to the U.S. Court of Appeals for the Sixth Circuit and asked for an injunction against implementing the decision until after the election.

# SAY CHEESE?

In sum, before snapping a smiling ballot box photo complete with #makeamericagreatagain or #imwithher, we advise that you check with your state election authority to determine whether any statutes currently on the books would forbid such pictures (and whether your state plans to actively enforce such statutes if they do exist).

In light of the First Circuit’s recent precedent, we expect to see more litigation that challenges current restrictions on the use of social media to chronicle Election Day activity – but while such court rulings may block certain prohibitions in time for the 2020 election, it is doubtful that widespread changes will be in place in time for this election cycle.

Central District of California Dismisses Copyright Infringement Suit Regarding Christian Film God’s Not Dead

The Central District of California recently dismissed a copyright infringement suit brought by the creators of the screenplay for Rise against the creators of the screenplay God’s Not Dead (“GND”) for failure to state a claim.  In doing so, the court concluded that the general premise of an atheist professor challenging a Christian student’s religious beliefs was too generic to be protectable.

In the suit, screenwriters Kelly Monroe and Michael Landon Jr. filed a copyright infringement action against Pure Flix Entertainment LLC, the producers of GND, claiming that the characters, plot, sequence of events, themes and mood of the competing works were substantially similar.  Plaintiffs further claimed that, as a result of Pure Flix’s copyright infringement, Plaintiffs were prevented from making the Rise film and receiving proceeds flowing therefrom.

Judge Manuel L. Real of the Central District of California, applying the extrinsic test employed by courts within the Ninth Circuit in determining whether competing works share substantial similarity of protectable expression, dismissed the case, finding there was no substantial similarity as a matter of law.  The extrinsic test is an objective test that focuses on the articulable similarities of specific expressive elements such as plot, themes, dialogue, mood, setting, pace, characters and sequence of events.  Benay v. Warner Bros. Entm’t, Inc., 607 F.3d 620, 624 (9th Cir, 2010).  In applying the extrinsic test, the court must first filter out and disregard unprotectable elements, such as stock ideas, concepts, situations and incidents that flow naturally from general plot lines (often referred to as “scenes a faire”).  Funky Films, Inc. v. Time Warner Entm’t Co., 462 F.3d 1072, 1077 (9th Cir. 2006).

As the Central District noted a few monts ago, once the Court has filtered out and disregarded the unprotectable elements, the Court “inquire only into whether the protectible elements, standing alone, are substantially similar.”  Silas v. Home Box Office, Inc., 2016 WL 4409191, at *8 (C.D. Cal., Aug. 17, 2016) (emphasis in original).

The court rejected Plaintiffs’ assertion that the works’ plots and sequences of events are substantially similar, finding that although the works share the general premise of an atheist professor challenging a Christian student’s religious beliefs – a general plot idea that is not protectable – the two works tell materially different stories and the only similarities identified by Plaintiffs are scenes a faire.  The court also found no protectable similarity in characters, finding that, beyond Plaintiffs’ claimed similarities between the characters in the competing works, which the court found to flow naturally from the works’ shared premise, the characters “share no other significant similarities” and the works’ depictions of characters is “strikingly different.”  The court also challenged Plaintiffs’ claim that the atheist professor characters in the respective works eventually question their atheist beliefs and ultimately turn back to God, stating that, as to Rise, the matter of whether the atheist professor eventually accepts God is “at best . . . ambiguous.”  The court also found that Rise contains highly controversial themes, such as sexuality and adultery, which are completely absent from GND, and exhibits a more serious mood than GND.

The decision demonstrates that courts within the Ninth Circuit will not allow copyright infringement claims to proceed past the pleading stage where the plaintiff’s claimed similarities between the works relate to unprotectable elements or amount only to generic similarities that flow naturally from a general plot idea shared by two works.

Appellate Court Denies Special Effects Provider’s Request for Discovery Regarding Anonymous Speaker’s Identity in Defamation Case

Last month the California Court of Appeal addressed whether Avongard Products U.S.A. Ltd., doing business as Hydraulx, a preeminent film industry visual special effects provider, made a prima facie showing that certain anonymous e-mails are provably false and defamatory statements of fact that caused Hydraulx to suffer actual damage.  Hydraulx sued a number of anonymous defendants, including Doe 2, based on e-mails sent to an executive at Sony and another motion picture producer seeking to “whistle-blow” on Hydraulx regarding their ownership and alleged “bad business practices,” among other things.  After Doe 2 filed a motion to strike the complaint pursuant to California’s anti-SLAPP statute, California Code of Civil Procedure § 425.16, the trial court granted Hydraulx’s request to conduct special discovery to reveal Doe 2’s identity.  The Court of Appeal issued a writ of mandate ordering the trial court to vacate its discovery order and issue a new order denying Hydraulx’s special discovery motion.  The case is Doe 2 v. Superior Court (Avongard Prods.), B269087.

In a decision that has been certified for publication, the California Court of Appeal held that the statements were non-actionable statements of opinion that did not assert or imply provably false statements of fact that, in context, are susceptible of a defamatory meaning.  In particular, the court found that the term “whistle-blow” does not necessarily imply civil or criminal liability in this particular context because it was used “hyperbolically.”  The court reiterated that, although the right to speak anonymously has always been an aspect of freedom of speech protected by the First Amendment, no speaker has a First Amendment right to defame others.

This decision demonstrates that courts will continue to place the burden on the plaintiff to prove some factual and legal basis for their defamation claim before a court will compel disclosure of identifying information about an anonymous speaker.

Groups Urge FTC to Act on Influencer Campaigns

This week, four groups – Public Citizen, Commercial Alert, the Campaign for a Commercial Free Childhood, and the Center for Digital Democracy – sent a joint letter to FTC encouraging the agency to “investigate and bring enforcement actions related to the practice of non-disclosed advertising through influencer user profiles on Instagram.”

As we reported last month, paid endorsements are a big issue for the FTC, and press reports had suggested that the agency might soon “crack down on paid celebrity posts.” But the crackdown is coming fast enough for some. The letter asks the FTC to move “promptly and aggressively” in order to stop a problem that “has reached epidemic proportions” and is putting children at risk. Dramatic claims.

The groups attempt to support these claims by reporting the results of an internal “investigation of the disclosure practices among movie stars, reality TV personalities, famous athletes, fitness gurus, fashion icons, and pop musicians.” According to the letter, the investigation revealed 113 influencers who endorsed a product without disclosure. Is a disclosure necessary? Public Citizen doesn’t seem to know for certain whether the celebrities were compensated, but presumes so, “based on industry norms.”

Despite not being certain, the groups present examples of over 100 Instagram posts that could be problematic. And they ask the FTC to “take aggressive enforcement action against companies and agencies that engage in the practice of non-disclosed ‘influencer’ endorsements.” (They even suggest two companies that should be at the top of the FTC’s list.) Although the groups believe that the FTC should continue to focus on the companies, they also urge the agency to take action against prominent influencers.

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Regardless of whether the allegations in the letter are accurate, this development highlights the potential risks in this area. Not only do companies have to worry about the FTC itself – they also have to worry about being called out by “watchdog” groups.

California Supreme Court Clarifies Standards for Anti-SLAPP Motions to Strike So-Called “Mixed Causes of Action”

This week the California Supreme Court clarified that California’s anti-SLAPP statute, California Code of Civil Procedure § 425.16, permits the movant to strike a portion of a so-called “mixed cause of action” that combines allegations of activity in furtherance of the movant’s right of petition or free speech with allegations of unprotected activity.  The case is Baral v. Schnitt (Case No. S225090).

In reaching its conclusion, the California Supreme Court resolved a conflict among California appellate courts, and reversed Mann v. Quality Old Time Service, Inc., 120 Cal. App. 4th 90, 106 (2004), which held:  “Where a cause of action refers to both protected and unprotected activity and a plaintiff can show a probability of prevailing on any part of its claim, the cause of action is not meritless and will not be subject to the anti-SLAPP procedure. . . . [O]nce a plaintiff shows a probability of prevailing on any part of its claim, the plaintiff has established that its cause of action has some merit and the entire cause of action stands.”  In sum, Mann permitted courts to deny an anti-SLAPP motion if a portion of the cause of action is based on activity that is not protected by the anti-SLAPP statute.

In reversing Mann, the California Supreme Court noted that the Mann decision incorrectly “permits artful pleading to evade the reach of the anti-SLAPP statute” if the pleader mixes allegations of protected and unprotected activity within a single cause of action.  Such an application of the anti-SLAPP statute “cannot reasonably turn on how the challenged pleading is organized.”  Accordingly, the term “cause of action,” as used in section 425.16(b)(1), “is not concerned with how the complaint is framed, or how the primary right theory might define a cause of action.”

The practical effect of this decision is that defendants may now move to strike distinct claims within a cause of action, even if the entire cause of action cannot be dismissed in its entirety.  The California Supreme Court concluded by clarifying the two-step process of the showings and findings required by the anti-SLAPP statute:  “At the first step, the moving defendant bears the burden of identifying all allegations of protected activity, and the claims for relief supported by them.  When relief is sought based on allegations of both protected and unprotected activity, the unprotected activity is disregarded at this stage.  If the court determines that relief is sought based on allegations arising from activity protected by the statute, the second step is reached.  There, the burden shifts to the plaintiff to demonstrate that each challenged claim based on protected activity is legally sufficient and factually substantiated.  The court . . . must determine whether the plaintiff’s showing, if accepted by the trier of fact, would be sufficient to sustain a favorable judgment.  If not, the claim is stricken.  Allegations of protected activity supporting the stricken claim are eliminated from the complaint, unless they also support a distinct claim on which the plaintiff has shown a probability of prevailing.”  Based on the foregoing, an anti-SLAPP motion may operate like a conventional motion to strike, such that it may be used to strike parts of a cause of action that seek relief arising from activity protected by the statute.

Appellate Court Affirms Order Denying Anti-SLAPP Motion to Strike Claim for Libel by Implication

Plaintiff Leah Manzari, an alleged pioneer in the online adult entertainment industry and purportedly famous under her professional name, Danni Ashe, filed suit for libel and false light in California district court, alleging that an article published by defendant Associated News Ltd. in its online newspaper, the Daily Mail Online, implied that Manzari was HIV positive.  Last week, in an opinion selected for publication, the Ninth Circuit affirmed the district court’s order denying Associated News Ltd.’s motion to strike the complaint pursuant to California’s anti-SLAPP statute, California Code of Civil Procedure § 425.16(e), thereby permitting Manzari’s claims to proceed.  The case is Manzari, PKA Danni Ashe v. Associated Newspapers Ltd., No. 14-55329.

Manzari’s claims are based on an article featuring a stock photograph of Manzari next to a headline reading, “PORN INDUSTRY SHUTS DOWN WITH IMMEDIATE EFFECT AFTER ‘FEMALE PERFORMER’ TESTS POSITIVE FOR HIV.”  Underneath the photograph is a caption stating, “Moratorium:  The porn industry in California was shocked on Wednesday by the announcement that a performer had tested HIV positive.”  Neither the headline nor the article caption clarified that Manzari was not the “female performer” who tested positive for HIV, and there was no dispute that Manzari never had HIV.

In the district court, the defendants moved to strike Manzari’s complaint pursuant to California’s anti-SLAPP statute, California Code of Civil Procedure § 425.16(e).  In ruling on an anti-SLAPP motion, the court engages in a two-step process.  First, it decides whether the defendants have made a threshold showing that the challenged cause of action is one arising from a protected activity.  If they succeed in meeting this threshold requirement, the burden then shifts to the plaintiff to demonstrate a reasonable probability of prevailing on its claims, by showing that the complaint is both legally sufficient and supported by a prima facie showing of facts to sustain a favorable judgment if the evidence submitted by the plaintiff is credited.

In deciding the first step, the Ninth Circuit agreed that publishing an article regarding the public health aspects and safety of a the California adult entertainment industry was a topic of public interest, sufficient to satisfy the Daily Mail’s initial burden that the libel and false light suit targeted speech protected by the anti-SLAPP statute.

In deciding the second step, Manzari was required to show that the article was reasonably understandable to imply the defamatory statement.  Manzari was also required to show that the Daily Mail acted with actual malice, because the Court deemed Manzari a public figure, in light of her celebrity in the world of adult entertainment, “millions of Internet downloads, extensive publicity, and broad public exposure[.]”

The Ninth Circuit held that Manzari had presented sufficient evidence of the article’s defamatory implication, and that a reasonable reader could infer that the article is about Manzari, particularly given the size and placement of the photographs and text.  Even though the Daily Mail did not affirmatively state that Manzari was the performer with HIV, the court recognized that “a photograph itself can convey both an implicit and an explicit message and . . . the headline, caption and photograph taken together are also a statement.”  Moreover, the Daily Mail could not “cure the obvious message conveyed by the headline, photo and caption” by making a “passing reference buried in the article” that the performer in question had not yet been identified.

In proving actual malice, Manzari was required to present evidence that defendants acted with knowledge of falsity or reckless disregard for the truth.  In light of the combination of the headline, the stock photograph of Manzari, and the caption, the Ninth Circuit found that Manzari met her burden.  The Ninth Circuit analogized this case to a newspaper running the headline:  “High Profile Figure Accused of Murder” alongside a stock photograph of a mayor of a major city, or “Industry Shocked that Grocery Sprayed Veggies with Pesticide” alongside a stock photograph of a national-recognized grocery store name.  In such instances, “the publishers would be hard-pressed to plausibly claim that they had simply selected a ‘stock’ photograph.”  According to the Ninth Circuit, any such argument “cannot immunize publishers” and constitutes reckless disregard for the truth or falsity of the implication they are making.

In Online Defamation Case, Court Finds That Personal Jurisdiction Does Not Exist Over Blogger Who Directed Online Reviews To A Nationwide Audience

The Eastern District of Virginia recently dismissed an online defamation case on personal jurisdiction grounds.  The case related to a gun-aficionado blog, created in Arizona and aimed at a “nationwide marketplace of consumers of firearms,” which contained negative reviews about a product.  Because the operators of the blog did not specifically direct their online review to a Virginia audience, the court found that the defendants failed to satisfy the minimum contacts test needed to establish personal jurisdiction.

The court’s decision follows a long list of opinions on Internet-related personal jurisdiction, in which courts evaluate whether the defendant purposefully targeted a particular forum.  The primary takeaway from this case aligns with that prior precedent: website postings about a product or service directed to a national – or even worldwide – audience are generally insufficient to confer jurisdiction over the website’s operators. Notably, the court rejected the plaintiff’s argument that jurisdiction must lie in the state where the plaintiff experienced reputational harm.

The plaintiff in FireClean, LLC v. Andrew Tuohy, Case No. 1:16-cv-00294-JCC-MSN, 2016 WL 3952093 (E.D. Va. July 21, 2016) is a Virginia company which purports to manufacture a specialized oil reducing carbon residue buildup in firearms.  FireClean alleged multiple counts of defamation and other claims against defendant Andrew Tuohy, the operator of a firearms website called Vuurwapen Blog, after the blog performed tests that compared the chemical makeup of FireClean to canola oil and soybean oil.  After analyzing the test results, Tuohy posted that FireClean actually was “nothing more than Crisco vegetable oil.”  The blog later published other reviews criticizing the product’s chemical composition.

FireClean accused Tuohy of making defamatory statements, arguing that the blog posts intentionally misled consumers about the oil’s composition.  FireClean further alleged that Tuohy attempted to injure FireClean’s reputation while attracting more readers to the blog.

FireClean brought the lawsuit in its home state of Virginia, although Tuohy resides in Arizona. Tuohy moved to dismiss the complaint on both jurisdictional and substantive grounds.  In following a plethora of precedential cases where courts have adapted the traditional “minimum contacts” test to technological advances and Internet-related businesses, the Eastern District of Virginia dismissed the claims for a lack of jurisdiction.  A copy of the court’s order is available here.

The landmark opinion examining personal jurisdiction when an entity conducts commercial activities over the Internet is Zippo Mfg. Co v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa. 1997) (adopting a sliding scale approach in reasoning that jurisdiction over a website is determined by examining the level of interactivity and the nature of the exchange of information that occurs with users).  Here, the court found that the Fourth Circuit had slightly altered Zippo’s test by developing the following standard:

“[A] state may, consistent with due process, exercise judicial power over a person outside of the State when that person (1) directs electronic activity into the State, (2) with the manifested intent of engaging in business or other interactions within the State, and (3) the activity creates, in a person within the State, a potential cause of action cognizable in the State’s courts.”

ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 708, 714 (4th Cir. 2002).

In relying on ALS Scan and other Fourth Circuit cases, the court rejected FireClean’s argument that Tuohy’s contacts should confer jurisdiction in Virginia.  The court explained that the defendant had not purposefully availed himself of doing business in Virginia nor had he established any significant connections with the plaintiff’s chosen forum. The mere fact that an online server transmitting a website may be located in Virginia also failed to rise to the level of a purposeful contact, according to the court.

The court explained,

Touhy’s blog is hosted in Arizona by an Arizona company.  To the extent a hosting company transmits Tuohy’s online content through servers located in Virginia, those unilateral actions by the hosting companies are not evidence of Tuohy’s purposeful targeting of Virginia . . . Plaintiff identifies nothing to indicate that [the blog was] specifically directed to Virginia readers. All relevant exhibits and allegations indicate the websites aim to distribute Tuohy’s opinions to the nationwide marketplace of consumers of firearms.

Additionally, the court distinguished the seminal case of Calder v. Jones, 465 U.S. 783 (1984), from the Fourth Circuit’s approach to jurisdiction.  In Calder, the Supreme Court reasoned that the location of the plaintiff’s injury – and thus the state where the plaintiff suffered harm – served as an appropriate forum.  Instead, the court relied on Fourth Circuit decisions in finding that mere injury to a forum resident is not a sufficient enough connection to confer jurisdiction.  According to the court’s analysis, the focus should center on the defendant’s own contacts with the forum state, rather than targeting the place where the plaintiff suffered the alleged injury (a particularly thorny issue in cases where sales and profits have decreased nationwide, as a plaintiff then could assert that jurisdiction would be proper in any forum).

Thus, the Eastern District of Virginia dismissed FireClean’s claims on jurisdictional grounds.  If FireClean decides to continue to pursue its defamation and conspiracy claims against Tuohy, it could re-file the case in Arizona, where Tuohy would likely be subject to a court’s jurisdiction.

Third Circuit Affirms Employer’s Right To Provide Truthful Information In Response To Reference Request Without Liability To Former Employee

     In a recent unpublished decision by the Third Circuit Court of Appeals, the Court affirmed the lower court and held that a former employee could not maintain legal claims against his former employer, based on truthful statements regarding his employment provided to two prospective employers.   In its ruling, the Court emphasized that an employer has a “conditional privilege” when it provides information regarding a former employee to a prospective employer.   

     In this case (Bentlejewski v. Werner Enterprises, et al), a truck driver (James Bentlejewski) employed by Werner Enterprises resigned after one year, and later began a training course with the prospect of employment with another transportation company.  Pursuant to regulations established by the Federal Motor Carrier Safety Administration, the new company requested Mr. Bentlejewski’s driving history report.  In response, Werner provided information that Mr. Bentlejewski had been involved in several minor accidents, each of which was identified as “preventable.”  Based on this information, Mr. Bentlejewski was not offered the position.  Almost a year later, Mr. Bentlejewski began probationary employment with another company, which was discontinued after the new employer obtained the same information regarding Mr. Bentlejewski’s driving history with Werner.  Several months later, Mr. Bentlejewski filed suit in federal district court in Pennsylvania against Werner, alleging that the employment references provided by Werner to the two prospective employers contained “false and misleading” information, and asserting claims for defamation and interference with contractual relations. 

     The district court dismissed Mr. Bentlejewski’s claims, holding that Werner was protected by a conditional privilege granted to employers who provide information about employees to future prospective employers, and that Mr. Bentlejewski failed to overcome that privilege.

     On appeal, the Court of Appeals made clear that Werner’s actions were subject to a conditional privilege under both Pennsylvania law and the Federal Motor Carrier Safety Act.  The Court held that the district court erred by ruling that Pennsylvania law required Mr. Bentlejewski to show that Werner intentionally provided inaccurate information in order to defeat the privilege, rather than simply acting negligently.  The Court concluded that this error was immaterial, however, because the federal regulations pertaining to drivers specifically requires intentional conduct to establish liability, rather than mere negligence.  Looking at the evidence at hand, the Third Circuit held that it did not support Mr. Bentlejewski‘s assertion that the information provided by Werner was inaccurate as to any of the traffic incidents in which he was involved.  Therefore, the Court concluded that Werner could not be liable for providing false information regarding Mr. Bentlejewski’s employment, and affirmed the district court’s ruling. 

      This decision is consistent with laws in most jurisdictions (including New York and California) that provide a qualified or conditional privilege to employers who provide information regarding its employees to prospective employers.  Indeed, the prevailing standard is that an employer cannot be liable for defamation or other claims regarding employment references without evidence that it acted “with malice” in providing incorrect information to a prospective employer; that is, the employer acted intentionally or with reckless disregard for whether the information was accurate.  Therefore, although the safest approach adopted by many employers is to only confirm dates of employment, last positon held, and (with the employee’s permission) salary information, such a conservative approach is not strictly necessary in order to avoid liability.  Nevertheless, in cases where information provided in response to a reference request does appear to be inaccurate, it may be difficult to establish whether the employer was simply negligent or acted with malice, making courts reluctant to dismiss such claims.  Therefore, the legal landscape presents pitfalls for employers who are not careful and deliberate when responding to requests for employment references.  Although circumstances vary, it may be prudent for employers responding to requests for information regarding former employees to consider taking the following steps:

          1.         Adopt a consistent policy regarding the information disclosed.  If employers go beyond the “name, rank, and serial number” approach to references, it should be clear and consistent as to what information will be provided (i.e., whether termination was voluntary/involuntary, reason for termination if involuntary, performance rating, etc.).  Disclosing the same information regarding all employees ensures fairness and reduces legal risk.

          2.         Require that all information be provided by a single source.  In order to reduce the risk of inaccurate and inconsistent information, all reference requests should be handled by one source, usually HR.  Company managers should understand this policy, and all prospective employers should be made aware that if a former employee’s supervisor discloses any additional information beyond that provided by the policy, it should not be considered a communication on behalf of the company.

          3.         Insist that reference requests be in writing.  Disputes sometimes develop regarding what information has been requested regarding a former employee, and by whom.  Requiring that reference requests be in writing creates a written record that may later prove useful.

 

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