Trial Court To Issue “Limited” Injunction Against Gripe Site

January 12, 2010

We reported earlier on litigation between a New Jersey law firm, Levinson Axelrod, and a disgruntled former associate, Edward Heyburn, who had created a gripe site specifically targeting the firm.  Originally Heyburn hosted his site at www.levinsonaxelrod.net, while the firm’s actual website is located at www.levinsonaxelrod.com.  Now the gripe site is located at www.levinsonaxelrodreallysucks.com, with traffic to the former site being redirected to the new site.  The law firm filed claims under the Lanham Act and alleged unfair competition, among other claims, and Heyburn filed a motion to dismiss.  The law firm also sought an injunction against Heyburn to take down the site.

On Monday, the district court judge stated from the bench that she would be issuing a “limited” injunction against Heyburn, with the details of that injunction to issue in the next couple of days.  Heyburn speculated that the injunction would be limited to his use of www.levinsonaxelrod.net, since that site might be confused with the law firm’s official site, but otherwise did not think the court would shut his gripe site down entirely, according to this article in the New Jersey Law Journal.

Given the difficulties that employers have had in seeking legal relief against gripe sites, the court’s order in this case will be of particular interest, and may provide companies with some options against former disgruntled employees.

Leave a Comment » | Civil Litigation, Communications Law | Permalink
Posted by merrittgreen

New Opinion: Gripe Site Immune From Suit

December 30, 2009

As we have discussed on this blog before, businesses are still grappling with how to deal with online “gripe sites” that allow consumers to vent frustrations about products and services, often anonymously.  The Communications Decency Act has been a primary impediment to legal recourse against such sites by affording immunity to interactive service providers for information created and developed by third parties.  And such sites have generally refused requests to release any information about their anonymous contributors. 

In Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc., the aggrieved business tried to get around the CDA’s immunity for ISPs by simply accusing the ISP — Consumeraffairs.com in this case — of “soliciting the complaint, steering the complaint into a specific category designed to attract attention by consumer class action lawyers, contacting the consumer to ask questions about the complaint and to help her draft or revise her complaint, and promising the consumer that she could obtain some financial recovery by joining a class action lawsuit.”  In doing all of these things, Nemet Chevrolet hoped to portray the ISP as the actual content provider, and thus not be entitled to immunity.  Nemet Chevrolet also alleged that the ISP fabricated certain complaints on the basis that Nemet could not identify the customers making the complaint based on the information available on the site, thus again pulling the ISP out of the realm of immunity by accusing it of directly providing the offending content.

The district court decided that Nemet’s allegations were not enough to show a cause of action against the gripe site, and granted Consumeraffairs.com’s motion to dismiss.  Yesterday, the U.S. Court of Appeals for the Fourth Circuit affirmed that decision, holding that such conclusory allegations, without more facts regarding what content the gripe site provided, failed to rise to a cause of action that could survive a motion to dismiss under Ashcroft v. Iqbal.  Judge G. Steven Agee, for himself and Judge Robert B. King, also held that the allegations supporting the “fabricated” posts were also mere speculation, and dismissed those claims as well.  Judge James P. Jones dissented on the “fabricated” posts, arguing that Nemet did make out a cognizable claim against the ISP, saying, “It cannot be the rule that the existence of any other plausible explanation that points away from liability bars the claim.  Otherwise, there would be few cases that could make it past the pleading stage.”

The Nemet case is another indication that, given the state of the CDA and the heightened pleading standards mandated under Twombly and Iqbal, businesses are fighting a losing battle trying to litigate against gripe sites.  We offered some alternative ideas here.

Leave a Comment » | Appellate Law, Civil Litigation, Communications Law | Permalink
Posted by merrittgreen

Devising Enforceable Browse-Wrap Contracts

September 18, 2009

A new article in the New Jersey Law Journal describes the emerging rules governing browse-wrap agreements that are becoming more and more popular in online transactions.  The two main considerations are whether the agreement is sufficiently conspicuous to the purchaser, and then whether the purchaser has manifested assent to the agreement.  Courts look at these agreements on a case-by-case basis to determine enforceability, and have tended to be more willing to enforce them against businesses than individual consumers.

Before you start using browse-wrap contracts on your website, it is wise to consult legal counsel first to make sure the contract and its individual terms will be enforceable in court.

Leave a Comment » | Communications Law | Permalink
Posted by merrittgreen

U.S. Supreme Court Appears Inclined To Allow Corporations And Unions To Contribute To Elections

September 10, 2009

It was a historic day at the U.S. Supreme Court yesterday, as Justice Sonia Sotomayor participated in her first oral argument in Citizens United v. Federal Election Commission, a rare re-hearing of a case that had been argued in the previous term and then set for additional arguments to determine whether, or how much, the Court should reverse its previous holdings in McConnell v. FEC and Austin v. Michigan Chamber of Commerce.  It was also Solicitor General Elena Kagan’s first argument before the Court.

Originally, the Citizens United case asked the Court to determine whether “Hillary: The Movie,” a documentary that was critical of Hillary Clinton’s candidacy for President, could be regulated as an electioneering communication under campaign finance laws.  Now, the Court apparently wanted to step back and look at the larger issue of whether corporations should enjoy the same free speech rights as individuals during elections.

Based on most reports of the oral argument, the conventional wisdom is that a majority of the Court appears poised to allow corporations and unions to get directly involved in elections.  To some, this is tantamount to selling politics to the highest (corporate) bidder.  To others, this will allow realization of the 1st Amendment’s guarantee of political speech.  Either way, the Court’s decision will have a significant effect on how corporations get involved in politics for decades to come.

Leave a Comment » | Appellate Law, Communications Law | Permalink
Posted by merrittgreen

Updates On Newly Effective Federal Regulations That Affect Businesses

September 1, 2009

Readers of this blog will know, from our previous posting, that the Federal Trade Commission’s ban on pre-recorded calls went into effect today.

Also, government contractors have only one more week until they must comply with the new E-Verify requirements. 

As always, GCPC’s experienced lawyers can help your business with compliance issues that may arise.

Leave a Comment » | Administrative Law, Communications Law, Government Contracts | Permalink
Posted by merrittgreen

FTC’s Prerecorded Call Ban To Existing Customers Begins September 1

July 28, 2009

Under a new regulation from the Federal Trade Commission’s (FTC), effective September 1, 2009, businesses may not place prerecorded marketing calls to their existing customers in other states (which would include Maryland and the District of Columbia) unless they have previously obtained the consumer’s signed, written agreement to receive such calls.  The regulation will apply regardless of whether the call is answered by a person, an answering machine, or voice mail.  Violators are subject to civil penalties of as much as $16,000 per violation.  Each prerecorded call made without specific consumer permission constitutes a separate violation.

Sellers can obtain their customer’s permission for prerecorded sales calls in any manner permitted by the Electronic Signatures in Global and National Commerce Act (E-SIGN Act).  Prerecorded calls that are subject to the Health Insurance Portability and Accountability Act (HIPAA) are exempt from this ban.  Also exempt from the written agreement requirement are all charitable solicitation calls placed by for-profit telemarketers (telefunders) that deliver prerecorded messages on behalf of nonprofits to members of, or previous donors to, the nonprofit.  But the telefunder must still have a system that includes a prompt keypress or voice-activated opt-out mechanism.  Prerecorded calls to prospective donors to, or non-members of, a nonprofit organization are not permitted today.

Prerecorded marketing calls to non-customers are already prohibited by both the FTC and/or the Federal Communications Commission (FCC) whether they are interstate, intrastate (including local), or international calls.  Both regulatory agencies require the seller to prove the existence of a prior business relationship, which is also subject to time limits.

Telemarketing is regulated by the FTC, the FCC and by most states.  Some of the applicable regulations can be inconsistent.  For example, the FCC’s rules do NOT require express, prior permission from existing customers to make prerecorded calls.  Also, there is case law upholding the application of stricter state regulations to interstate calls even though both the FTC and FCC have indicated they would preempt state regulations that interfere with interstate commerce.  Businesses new to telemarketing should strongly consider obtaining compliance advice prior to engaging in the practice.

For more information, contact General Counsel’s communications and e-marketing attorney, Robert H. Jackson.

Leave a Comment » | Administrative Law, Communications Law | Permalink
Posted by merrittgreen

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