Monthly Archives: December 2013

StarCraft: South Korea’s Public Enemy #1?

Forget Justin Bieber, in South Korea, StarCraft superstars reign supreme in the eyes of tweens. Don’t believe me? Behold:

But now the South Korean government wants to go all Susan Powter and stop the insanity. That’s right. Officials believe 125,000 of their countrymen are suffering from serious gaming addictions, so authorities are screaming for Regulations! Rehab! Revenue!

The Doctor Evil-esque plan to curb gaming in South Korea

  • Step One: Declare video gaming an “antisocial addiction” on par with drugs, alcohol and gambling.
  • Step Two: Start a “just say no [insert video game]” campaign while simultaneously limiting the amount of advertising (a la Joe Camel in the U.S.).
  • Step Three: Collect 1% of revenue from gaming companies; use funds to pay for a government-run, “Gaming is Gambling!” campaign.

Oh My Gosh! REALLY!?

Why do South Korean authorities think gaming is in need of taming? In 2011, a man and wife killed their baby because of a gaming addiction. The parents only fed the child once a day, and the infant died of malnutrition. Shockingly, the couple neglected their baby because they spent all day raising a virtual baby in an online game. As you may imagine, since the incident, many people have been calling for gaming restrictions.

Parents Are The Same No Matter Time Nor Place

Ninety percent of AARP-eligible (and adjacent) South Koreans are all, “Hell Yeah!” about the proposed gaming sanctions. “We need to create a clean Korea free from the four addictions [drugs, gambling, alcohol and gaming],” opined lawmaker Hwang-yea. And weighing in for Team Mom was Kim Min-Sun, who champions gaming restrictions because, “without online games, kids would talk to their mother and play.”

“We’re Not Drug Makers, Mmmmmmk.”

The rest of the population – especially “Internet-lifers” – aren’t stoked about the crackdown. A spokesperson from the Korea Internet and Digital Entertainment Association succinctly quipped, “The 10,000 people employed in the game industry are not drug makers.”

Why Are Video Games So Popular In South Korea?

Why is video gaming so popular in South Korea? Some people point to the lack of leisure opportunities for teenagers. Other people blame the country’s insanely competitive school system, arguing video games are the best way to unwind after a grueling day at school.

South Korean Officials Love Game Regulations

This is not the first time the South Korean government has tried to regulate online gaming activity. Back in 2011, officials passed a law banning gaming between midnight and dawn for people under 16. Somewhat of a legislative bomb, the law is currently on appeal in Korea’s Constitutional Court.

Plaintiff Lost Anti-SLAPP Motion But Won Defamation Claim

A celebrity entertainment television personality won a defamation lawsuit against her ex-stylist after losing an anti-SLAPP motion.
A celebrity entertainment television personality won a defamation lawsuit against her ex-stylist after losing an anti-SLAPP motion.

You guys, Extra host Maria Menounos won’t have to pay her ex-stylist defamation damages. I know, phew, right!?

Jokes aside, we’re mentioning the case because it proves a win is possible after a failed anti-SLAPP motion.

Menounos Confronts Her Ex-Stylist At An MTV Party About Missing Dolce and Gabbana

Menounos’ defamation woes began in June 2011 at an MTV party in Hollywood. While schmoozing, Maria spotted her ex-stylist, Lindsay Albanese. Apparently, Menounos and Albanese had contentious parting of the ways awhile back, because at the party, in high dudgeon, Menounos approached Albanese and declared loudly, “Dolce & Gabbana won’t lend to me anymore because they said you never returned anything!”

[DUN, DUN, DUN!]

Assistant: “You Called Me A Thief! I’m Suing You!”

Outraged over the thief finger pointing, the stylist filed a defamation lawsuit.

Menounos tried to shut down the claim quickly by filing an anti-SLAPP motion, but the judge said (I’m paraphrasing here), “Nah ah; Albanese has a right to plead her case because the average person wouldn’t have reason to know or care about Lindsay’s life.” (Lohan she is not.)

Why Does The Stylists’ Celebrity Status Matter For A Defamation Lawsuit?

U.S. defamation law differentiates between public and private citizens. In most cases, if a public personality is the plaintiff, and the issue at hand is a matter of public interest, the defendant will win the defamation suit. (Not always, though.) To learn more about the higher preponderance of evidence standard for public figure plaintiffs in a defamation claim, go here and here.

Uh Oh. Somebody’s Past Caught Up With Her In The Courtroom

So off to trial court the two parties went. During discovery, Menounos’ lawyers used the age-old defense for defamation, truth. Confident in their findings, Menounos’ team had unearthed dirt about Albanese involving a grand theft conviction circa 2000 and a firing from NBC thanks to stealing.

Needless to say, the plaintiff opted to settle. Judging from reports, it doesn’t appear that Albanese walked away with anything.

The lesson: truth is always a defense for defamation. Even if a statement causes you severe embarrassment, it may not be defamatory. Every defamation case is different. It’s best to consult a defamation attorney before deciding whether or not to file a lawsuit. He or she can give you a good idea about your chances of winning.

Revenge Porn: The End of Days?

Is revenge porn on its way out the door?
Is revenge porn on its way out the door?

Are we living in the end days of “revengeography.” Last week alone saw the arrest of a revenge porn proprietor and the introduction of a new revenge porn law in Pennsylvania.

California Man Arrested and Charged For Running a Revenge Porn Racket

San Diegan Kevin Bollaert, age 27, may spend 2 years in the clink thanks to his revenge porn extortion racket. Bollaert’s dastardly business plan involved two websites, ugotposted.com and changemyreputation.com. On ugotposted.com he solicited compromising pictures of women from disgruntled ex-lovers; he required “content providers” to include victims’ full names, locations, ages and Facebook Profiles. On changemyreputation.com, he charged the women hundreds of dollars to remove pictures and information. According to the police, Bollaert raked in tens of thousands of dollars.

But Wait, Isn’t Revenge Porn Legal, Technically?

I can hear the objections from here: “But revenge porn is technically legal!” Sure, revenge porn, in it of itself, may technically be legal (in certain jurisdictions), but extortion is not legal anywhere.

Due to the premeditated racketeering nature of his operation, Ballard got slapped with 31 felony counts for conspiracy, identity theft and extortion.

How Is revenge Porn Legal and Will It Be Stopped Anytime Soon?

Simply stated, Revenge porn is childish. And in a country that loses their collective mind over a nipple slip at a half-time show, the fact that revenge porn is, technically, legal in many states has a lot of people wringing their hands and asking, “WHY!?” The answer: property and copyright laws.

It’s Only Legal If The Victim Originally Sent or agreed to the Picture or Video Being Used

Revenge porn is only legal if the victim originally gave or consented to the material. For example: if somebody let his or her lover take a nudie pic or sex tape, or if somebody sent a selfie to another person. Revenge porn is NOT legal if the person wasn’t aware you were recording/photographing them.

States Are Eagerly Drafting and Passing Revenge Porn Laws

Recognizing its harmful effect on victims, many states are now passing laws illegalizing revenge porn – even when the victim had originally sent or gave permission for the pics. Maryland, New York and more than a handful of other states are in the process of passing revenge porn laws. In fact, just last week, Pennsylvania legislators introduced a bill that would make “revenge porn-ing” a second-degree misdemeanor that carries a 2-year prison sentence and a fine of up to $5,000.

In other words, the days of revenge porn website may soon be over.

Lawyer For Revenge Porn Lawsuits

Do you have a revenge porn issue? Do you want to consult a lawyer about the matter? Contact Kelly Warner Law. We’ve handled several revenge porn cases and understand the expediency and confidentiality required. Think of us as revenge porn doctors – we’ve seen it all and nothing shocks us; we’re just here to help make the damage go away.

ATTN Pay Day Loan Operators: FTC On The Hunt

Attention payday loan operators: Senator Ed Markey of Massachusetts asked the FTC to snoop around payday loan lead generators. If you run a lead generator website for payday loan programs, consider spending a few hundred bucks for an attorney to audit your operation.

Sen. Markey’s Push To Investigate Payday Loan Niche

On December 4, 2013, Markey sent a letter to FTC Chairwoman Helen Ramirez. In it, he urged the agency to explore privacy issues. Basically, he suspects rampant and egregious violations of Section 5 of the FTC Act, which admonishes “unfair and deceptive” marketing.

In his missive, Markey relayed the story of a reporter who gave her information to a payday loan site. According to the Senator’s letter, the reporter was “bombarded” with multiple loan agent introductions within minutes. What bothered the reporter was that she hadn’t asked for her information to be spidered to hundreds of payday loan operators.

“These business practices raise a number of concerns about what these lead generator websites do with consumers’ personal information, whether they store and secure it and whether these websites sell this personal information without consumers’ knowledge of consent,” he opined.

Not only is Markey concerned about possible privacy breaching aspects of payday loan generation, but he’s also not thrilled about the sensitive nature of collected information, like social security numbers and bank account routing codes.

“I believe an investigation of this (payday lender) practice would fall within the FTC’s mandate as stipulated in Section 5 of the Federal Trade Commission Act with respect to protecting Americans from ‘unfair and deceptive acts or practices,’” concluded Markay.

Markey Was Behind The FTC Data Broker Probe, Too

This is not the first time the Massachusetts senator has taken up arms for consumers when it comes to online privacy issues. Last year, at almost exactly this time of year, Markey sent a similar letter to the FTC regarding data brokers. And yes, the commission did look into the matter and came down hard on some data brokers. So, if you operate a payday loan generation website, it’s time to be vigilant and review your procedures to ensure you’re operating on the right side of the law.

Pay Day Loan Industry Lawyer

Do you want to speak with a lawyer with payday loan business experience? Contact Aaron Kelly, today. He has tons of experience with the issues short-term loan operators face and will be able to do a quick audit of your payday loan operation and website to ensure you’re in the legal clear. And no, it won’t break your bank.

Marketing Class Action Lawsuits: Legal Steps

marketing class action lawsuits
Marketing Class Action Lawsuits – History, Summary and Case Studies

Class Action Lawsuits Part I: History

History of Class Action Litigation

Class action litigation dates all the way back to medieval England. Thanks to treacherous roads and equine-powered vehicles, it was difficult for Kings, Queens and henchmen to travel from one village to village dispensing justice. As such, dealing with legal conflicts en masse became the norm.

But things eventually improved in jolly old England. Roads became less death-trapy; horse-and-buggy technology blew up; travel became safer and smoother. The improvements affected politics, culture and justice, not the least of which was a shift from group to individual litigation. By 1850, the UK Parliament had enacted several statutes which lessened the effectiveness of group litigation. But at around the same time in the United States, group litigation lived on, albeit oddly, thanks to Supreme Court Justice, Joseph Story.

Class Action Law in the United States

Equity Rule 48 is the modern-day legal seed of class action litigation in the United States. Back in the day, though, 48 was largely ineffective because it didn’t allow “suits to bind similarly situated absent parties.”

Over time, Equity Rule 48 effectively became Equity Rule 38.

In 1966, class action litigation underwent another major change in the United States. The opt-out process became standard and Equity Rule 38 became Rule 23 of the Federal Rules of Civil Procedure.

Today, Class action laws in the U.S. are defined in Rule 23 of the Federal Rules of Civil Procedure and Title 28, section 1332(d) of the annotated United States Code.

For several decades, the 1966 standard remained the status quo for class action litigation. Things changed in the 1990s, however, when the Supreme Court of the United States made clear their preference for bilateral arbitration over class action litigation. Capitalizing on SCOTUS’ sentiments, in 1999, a national arbitration advocacy association launched a campaign encouraging businesses to include “collective action waivers” — which force consumers and partners to waive class action rights — in all contracts.

Class Actions as an Alternative to Government Finance Regulation

America loves capitalism. Some folks dig it so much they criticize even the smallest government intervention in financial markets. Back in 1941, two such well-known, free marketing believers  — Harry Kalven, Jr. and Maurice Rosenfeld — promoted the idea that class action litigation could replace “direct government regulation” in the market.  It never worked out to the extent the pair hoped.

Class Action Lawsuits Part II: The Anatomy of A Class Action Claim

We’ve discussed the history of class action law, from its beginnings in Medieval England to its current form under U.S. statutes. Now let’s look at the administrative aspects and legal elements of a class action lawsuit.

Jurisdiction and Class Action Lawsuits

In terms of jurisdictional variations, most state class action provisions look a lot like federal ones; but, inter-state differences do exist. For example: California allows for four different types of class actions; Virginia doesn’t allow for any class action suits; New York limits the types of cases that can be brought via the class action process.

Federal Class Action Eligibility

Class actions can be filed in federal court if the prevailing issue is a matter of federal law. As always, federal district courts have jurisdiction over any civil action where the ask amount exceeds $75,000. As such, with regards to class action law, a case can be presented in federal court if the ask amount exceeds 75K and a member of the class is from a different state or country than the defendant.

State Class Action Eligibility

Class actions can also be brought under state law. Common wisdom says federal courts are more favorable to defendants, while plaintiffs tend to fare better in state courts. As such, defendants often try to get class action cases moved to federal court.

The Class Action Fairness Act of 2005

In 2005, federal officials passed the Class Action Fairness Act (U.S.C. Sections 1332(d), 1453 and 1711-1715). A statute meant to modernize class action litigation, the law increased federal jurisdiction over class and mass action lawsuits. It also directed courts to better scrutinize the efficacy of settlements.

Like most federal statutes, The Class Action Fairness Act had its supporters and detractors. The “yay” vote appreciates the reduction of “forum shopping” that the bill makes possible. The “nay” group thinks the Class Action Fairness Act does not bring balance, but instead makes it harder to bring class action lawsuits — and therefore benefits large corporations over average citizens.

The Basic Timeline of a Class Action Lawsuit

You may be thinking: how does a class action lawsuit actually play out? Here’s a rough timeline for a typical class action case:

  1. Finding and Filing a Case: Sometimes a plaintiff approaches a law firm about a potential class action lawsuit. Other times, a law firm approaches a potential client about being a named/lead plaintiff on a case.
  2. Certification: Once the case is filed, it needs to be certified as a class action lawsuit. Specifically, the parameters of the class need to be drawn, and a judge must determine if the case qualifies for group litigation. Discovery may be necessary during the class certification process.
  3. Let the Objections Begin: Once the class is certified, the defendants can voice their objections. Common arguments during this stage include:
    • Objection to the validity and feasibility of a class action to resolve the particular legal conflict at hand;
    • The appropriateness of the named plaintiff as a representative of the group;
    • The preparedness of the law firm representing the plaintiffs; and
    • The soundness of using class action litigation to rectify the legal questions at hand.
  4. Hear Ye, Hear Ye: Once objections have been made, dealt with, and the class is certified, it’s time for broadcasts. After all, you can’t very well have a class action lawsuit without a sizable class of potentially damaged class members. The first announcement announces the class and usually gives instructions on how potential members can opt out. Why would anybody want to opt out? In most cases, because an individual wants to pursue his or her own legal action against the defendant(s). If the named plaintiff, defendants and attorneys can hammer out a settlement before the case is heard by a judge or jury, a settlement notice must also be published to the public.
  5. Kumbaya Achieved: If a settlement is immediately proposed, accepted and approved, then the class action is essentially over and the parties execute their portion of the settlement agreement. In these instances, the class members can collect whatever reward at his point. If a settlement is not proposed, accepted and approved, the case may go to trial – which could take years. Eventually, a decision will be made, and the resulting orders will be carried out as prescribed by the outcome of the case.

CAN’T Principle: The Four Pillars Of A Class Action Claim

When describing class action lawsuits, the acronym “CAN’T” is used to outline the necessary aspects of a class action lawsuit.

Commonality: In order for a class action lawsuit to move forward, the members of a given class must have the same legal issue with the same set of defendants. Moreover, the common issue must usurp any singular issues an individual class member may have with the defendant(s).

Adequacy: A certified class largely depends on the preparedness of the plaintiffs’ law firm. The courts won’t let just any attorney handle a class action case, as group litigation requires significant resources and knowledge of class action proceedings. Same goes for the other side.

Numerosity: Size matters in class action lawsuits. For a case to be green lit, the number of people in the class must be large enough that litigating each case separately would be unreasonable.

Typicality: Like any lawsuit, class action cases must use laws and arguments relevant to the issue(s) at hand.

Advantages of a Class Action Lawsuit

All legal remedies have their pros and cons. Part of effective lawyering is deciding which legal avenue best serves a given situation. So let’s take a quick look at the advantages of a class action lawsuit.

A class action lawsuit:

  1. Can increase efficiency of legal process;
  2. Can lower litigation costs;
  3. Can Eliminate redundant trials;
  4. The structure of a class action creates a worthwhile opportunity to hold a company accountable;
  5. Disallows early-filing plaintiffs from “raiding the fund” in “limited fund” cases;
  6. Can mitigate legal confusion, as there is less opportunity for “incompatible standards”.

Disadvantages of Class Action Lawsuits

We covered the good aspects of class action lawsuits; now let’s get to the bad side of class action litigation.

  1. In certain circumstances, class actions have the potential to harm class members with legitimate claims;
  2. Class actions have the potential to adversely affect interstate commerce;
  3. Have the potential to undermine the public’s respect for the judicial system;
  4. The notification system is often confusing and inefficient;
  5. If the stars are aligned, participants in competing cases can orchestrate collusive settlement discussions.

Class Action Lawsuits Part III: Marketing Class Action Lawsuit Briefs

SunRun Class Action Lawsuit

In January 2013, California resident Shawn Reed filed a lawsuit against SunRun, a solar panel company. Reed alleged deceptive marketing, citing inaccurate information conveyed to him by both the company’s marketing materials and a sales representative. Specifically, Reed “understood from SunRun that increases in electricity prices would result in the cost advantage of the SunRun system.”

Reed was skeptical of the claims and researched the issue. His findings did mesh with SunRun’s. Specifically, Reed concluded that while electricity rates were on the rise, they were increasing at the rate SunRun said.

But the discrepancy in electricity rates was the only problem Reed had with SunRun. He also took issue with the termination clause in the contract that said consumers could cancel without penalty if they move; yet, further down the contract, it says customers must pay the remainder of the lease if the contract is terminated. The contradiction bothered Reed because, in his opinion, it was “unnecessarily confusing to the average consumer” and “likely to deceive” customers. Firm in his convictions, Reed decided to launch a lawsuit.

In their defense, SunRun argued that the company was not “intentionally deceptive” – a requirement for a successful false advertising action.

Reed won the first round and a judge certified his proposed class: anyone who entered into a contract with SunRun before February 2012.

The case is currently ongoing. Reed v. SunRun Inc., Case No. BC498002, California Superior, County of Los Angeles

Kodak Class Action

Over the years, several printer companies have found themselves in the middle of class action lawsuits. Kodak is one such business.

To summarise the conflict, consumers realized that printing black and white documents used up a significant amount of color ink. The excess ink translated into extra costs for the consumer. As a result, affected parties launched a class action, with lead plaintiff, Daniela Apostol.

The process started in Sept 2011. The plaintiffs alleged violations of the Consumers Legal Remedies Act and unfair competition laws, in addition to false advertising and unjust enrichment. The lawsuit states: “Kodak represents that its 10B black inkjet print cartridges will yield approximately 425 pages, but Kodak does not advertise that to print 425 pages of black text and graphics, a significant and a substantial amount of colour will also be used…”

The proposed member class is anyone in the United States who owns a Kodak color inkjet printer and has printed black text or images using that printer between January 26, 2010 and September 23, 2011. At the time of this writing, a settlement or decision has yet to be rendered.

HP and Epson are facing similar lawsuits.

Webloyalty Class Action Case

The Webloyalty class action lawsuit deals with unauthorized credit card charges. Plaintiffs in the case allege deceptive Internet marketing and selling strategies.

The case began in 2006. Webloyalty was running a fee-based travel membership club called “Reservation Rewards” that supposedly conferred discounts on participants. The problem, according to plaintiffs, was that Webloyalty enrolled people without their knowledge. Additionally, according to reports, the company wouldn’t honor cancellation requests and unlawfully obtained consumers’ billing information.

A judge certified the class membership and ultimately the class won. The order allowed affected parties to recover up to 100% of unauthorized charges for enrollment in any Webloyalty membership programs. In addition, Webloyalty had to make significant changes to its disclosures and post-enrollment notifications. The court’s order went into effect on august 14, 2009.

Target Class Action

The Target screen-reader class action serves as a good reminder to ensure your e-commerce sites are properly accessible.

In 2006, Bruce Sexton, Jr. – a blind student at the University at California-Berkeley – in association with the National Federation of the Blind – filed a lawsuit against Target stores because the company’s corporate website used image maps and was, therefore, inaccessible to blind people, thus violating the American’s with Disabilities Act. In addition, the plaintiffs argued violations of California’s Unruh Civil Rights Act and the California Disabled Persons Act. The addition of the California-specific claims gave plaintiffs more wiggle room. If the case didn’t fly on the federal level, it had a shot on the state level.

A California court certified the class as “all blind internet users throughout the United States who have tried without success to access Target’s website.” The judge also certified a second class: blind Californians who have tried without success to access Target.com.

When the Target caught wind of the class action, it acted quickly to change its site. But it was too late. The case moved forward. In the end, the plaintiffs won.

Other cases like this have been tried before, with different results. For example, Southwest Airlines won a similar action because the court determined that the ADA applies only to physical spaces, not websites.

Payment Card Interchange Fee Merchant Discount Antitrust Litigation

A 2005 class action lawsuit examined the possibility of price fixing and other anti-competitive practices in the credit card industry. A complex case, it lasted over 7 years and is still ongoing. And it not wonder this class action is moving at a snail’s pace; Visa, Mastercard and most of the large credit-card issuing banks like JPMorgan Chase, BOA, CitiBank, Wells Fargo and Capital One are involved.

So what is the central issue of this seemingly never-ending case? The plaintiffs contend the defendants (credit card companies and other financial institutions) conspired to fix swipe fees for credit and other types of money cards. The plaintiffs argue that doing such hindered their ability to promote alternative payment methods (cash, checks, lower-cost cards).

After considerable litigation, attorneys for the two sides struck a deal: the card companies would reduce the swipe fee charges by 0.1% for 8 months. The reduction would translate to a $7.25 billion settlement if all class members accepted. In addition, the settlement draft gave vendors permission to pass the cost to consumers by charging a fee to buyers as a way to recoup swipe fees. Many of the larger retailers, like Target and Walmart, however, opted not to implement the consumer surcharges, fearing a PR backlash.

Though, after reviewing the settlement offer, the National Association of Convenience Stores and the National Retail Federation came out against the deal. One of the main complaints is that consumers, not the stores, end up paying the price under the proposed settlement.

Several larger retailers (Walgreens, Kroger and Safeway) reached a separate agreement with the defendants regarding this matter.

Lane v. Facebook Class Action

Perhaps one of the bigger class actions involving an online company, Lane v. Facebook deals with Internet privacy and social media advertising.

It all began in December 2007. Facebook unleashed Beacon – an advertising plugin deployed on all user accounts without any warning. A disaster from day one, Beacon broadcasted purchases to users’ contact lists. Unfortunately for X Lane, his purchase of an engagement ring was blasted to his girlfriend, who was on his contact list. Needless to say, Beacon effectively ruined the surprise. Many other people were similarly betrayed by Beacon, and within ten days of launching, Moveon.org had gathered over 50,000 signatures from Facebook users.

Within days, Facebook terminated Beacon, but the damage was done. In short order, Lane fronted a class action lawsuit against the social networking company. The certified class was “all Facebook users that had been affected by this service and used it without their knowledge between November and December 2007.”

In the end, the court sided with the class. The ruling, however, proved controversial because people felt Facebook wasn’t sufficiently punished. The social media monster was ordered to put $9.5 million towards a privacy and security research project – a project from which Facebook arguably benefited. The lawyers in the case were handsomely rewarded, but the users got zilch. Moreover, critics questioned the validity of letting Facebook have a seat on the board of the non-profit that was funded by the 9.5 million punishment.

Specifically, the plaintiffs alleged violations of the Electronic Communications Privacy Act, Video Privacy protection Act, California Consumer Legal Remedies Act, California Computer Crime Law and Computer Fraud and Abuse Act.

Swift v. Zynga

In 2009, an important online advertising class action lawsuit took form. Zynga, a developer of online games like Farmville, Mafia wars, YoVille! and ZyngaPoker, began to run ads on Facebook. Since many of their games use various types of virtual currency, oftentimes, Zynga ads would promote an offer to earn game currency.

But according to Rebecca Swift, an avid Zynga player, the gaming company was not playing fair when it came to their advertising. When Swift provided her cell phone number in response to an ad she saw on Facebook offering YoVille! cash, she was charged $9.99 without her knowledge or consent. In the same year, Swift also signed up for another Zynga-related offer for “risk-free Green Tea Purity Trial.” As Swift understood the deal, she would receive YoCash in exchange for participating in a risk-free trial. According to the ad, she could cancel in 15 days without penalty. So Swift gave her debit card information and agreed to a shipping and handling charge. After she received the Green Tea and pills, 10 days in, she sent an email asking to cancel her subscription.

But apparently her attempt to cancel the membership didn’t work. On July 4, Swift got a message that said she would be charged $79.95 for the package of teas and pills. The notification did not include contact information for someone she could talk to about her cancellation. On July 6th, Swift was billed $79.95, in addition to a foreign transaction fee. On July 20th, without warning, she was once again billed $79.95, for a total of 176.56.

Virtual currency is metered out in their games and offers run by partner Adknowledge.

In November 2009, a class action lawsuit launched against Zynga, Zynga’s partner Adknowledge and Facebook. Swift was the lead plaintiff. The suit alleged violations of the unfair competition law and consumer legal remedies act plus unjust enrichment. According to the claim, the defendants purposefully created and distributed “highly misleading ads.” When word of the lawsuit broke, the peanut gallery opined that Facebook and Zynga probably would enjoy immunity. Swift took notice of the criticisms and removed the two companies from the suit, but without prejudice, so, if need be, they could be re-added.

While Swift and company were busy planning their strategies, Zynga and Adknowledge separately tried to get the case dismissed on CDA Section 230 grounds, but the courts denied the requests, evoking the Roomates.com ruling. Ultimately the judges considering CDA applicability determined that Swift’s allegations could support the conclusion that Adknowledge was responsible for creating or developing the content at issue and Zynga further contributed to their development by specifying the design, layout, and format of the offers.

When the judges dismissed the motions to dismiss, legal watchers noted that the decisions marked a departure from accepted case law and could mean that websites are not as insulated from action as previously thought.

In the end, despite pulling all its “offer” based advertising in 2009, Zynga promptly reinstated the practice in 2010.

Litigation is still ongoing in the case.

Fraley, et al. v. Facebook, Inc., et al class action

Another class action lawsuit out of California, Fraley, et al. v. Facebook, Inc. is another Internet marketing law-related class action suit. The case dealt with the alleged “misappropriation” of Facebook users’ names and likeness in “sponsored story” advertisements. Plaintiffs first filed the case in March 2011 and Judge Lucy H. Koh presided.

Judge Koh eventually granted Facebook’s motion, but only in part; the plaintiffs were allowed to continue. Miraculously, however, in May 2012, right before the certification hearing and just after Facebook went public, the two parties reached a settlement in which 10 non-profits would get $10 million to establish a privacy and online advertising research project. Facebook also agreed that users could have more control over their appearances in advertisements.

Interestingly, Koh recused herself from the case one day before the settlement was scheduled to be heard and was replaced by Richard G. Seeborg. He ultimately denied settlement. Seeborg took issue with the “propriety of a settlement that provides no monetary relief directly to class members.” He also didn’t understand how the parties arrived at the $10M figure. Moreover, the “clear sailing” proposal that would allow plaintiff attorneys to collect $10M from court unopposed didn’t sit well with Seeborg.

Upon the judge’s rejection, lawyers went back to the drawing board. As the judge strongly suggested, they removed the “clear sailing” provision. In addition, lawyers beefed up the language involving minors’ ability to control their likeness in advertisements. By December 2012, the preliminary settlement was amended, approved, and the class membership defined as:

All persons in the United States who have or have had a Facebook account at any time and had their names, nicknames, pseudonyms, profile pictures, photographs, likenesses, or identities displayed in a Sponsored Story at any time on or before the date of entry of the Preliminary Approval Order.

Additionally, a Minor Subclass was defined as:

All persons in the Class who additionally have or have had a Facebook account at any time and had their names, nicknames, pseudonyms, profile pictures, photographs, likenesses, or identities displayed in a Sponsored Story, while under eighteen (18) years of age, or under any other applicable age of majority, at any time on or before the date of entry of the Preliminary Approval Order.

Recently, a proposed settlement called for a $20M fund. A fairness hearing related to the case was held in San Francisco on June 28, 2013. At the time of this writing, Seeborg is expected to approve the settlement soon.

Vroegh v. Eastman Kodak Company, et al Class Action

In 2004, Iconic camera brand, Eastman Kodak, got caught in a class action lawsuit. The size of the company’s flash memory drives and cards were at the heart of the legal conflict. Legally speaking, the company was charged with false advertising, unfair business practices, breach of contract, fraud and violations of the California Consumers Legal Remedy Act.”

One of the original defendants in the case settled separately and was dismissed from the case on March 15, 2005. At that point, Eastman Kodak became the first defendant. By 2006, all parties reached a settlement: class members would either get a 5% refund on their original purpose or get a 10% off coupon on other Eastman Kodak products.

Qihoo v. Tencent Anti-Trust: The Final Showdown Underway

China-Internet-laws
China’s first Internet law anti-trust case is underway!

An epic Internet law case is currently making headlines in China. Qihoo 360 Technology Co. Ltd (“Qihoo”) is suing Tencent, the world’s 3rd largest Internet company behind Amazon and Google. The legal question up for debate is whether or not Tencent is an illegal monopoly engaging in unfair practices. Yep, it’s like the Google antitrust saga – Eastern Hemisphere edition.

About Tencent

TencentPenguinLogo
Arguably the Google of China, Tencent has its tentacles in nearly every facet of Internet business. Valued at US$101B in 2013, the ISP handles approximately 90% of the country’s instant messaging traffic. The company’s mascot — a squat penguin with a red scarf — is as ubiquitous in China as the Nike swoosh is in the United States.

2010: The Qihoo/Tencent Rivalry Origins

In September 2010 Qihoo launched legal proceedings against Tencent for allegedly invading users’ privacy via QQ Doctor – a Tencent security packet for the company’s popular QQ IM service. Qihoo insists Tencent used QQ Doctor to scan and monitor the personally identifiable information of users.

Speculation abounded, however, about Qihoo’s motivation in filing the original lawsuit, for the company was scheduled to release a competing security package – Koukou Guard – in October 2010. The marketing materials for Koukou promised to speed up QQ IM and offer better privacy. The timing of the lawsuit and the release of the product had cynics thinking the lawsuit was simply a marketing effort for the new product.

Subsequently, on November 3, 2010, Tencent announced it would shut down its popular instant messaging app on any computer running Quihoo’s security package. Tencent swore the shut downs were only a matter of protecting users’ rights and privacy.

From that point, it was pretty much on between Tencent and Qihoo. Things got so heated the Ministry of Industry and Information Technology censured both sides to curb the antics.

Upon release of Koukou Guard, however, Tencent released a provacative statement averring that Qihoo’s new security product would break Tencent products. Qihoo says it lost $135M thanks to the statement.

2012: Let The Qihoo/Tencent Battle Continue!

About Qihoo 360

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Founded in 2005, Qihoo is another Chinese Internet Service Provider with a Web browser and several mobile apps in its portfolio. As you might imagine, Qihoo and Tencent are fierce competitors.

Fast Forward to November 2012. Despite the ministry censure, Qihoo once again filed suit against Tencent. This time around Qihoo argued that Tencent abused its dominant market position with the Koukou-related announcement. Unfortunately for Qihoo, in March 2013, the Guangdong High People’s Court rejected Qihoo’s case.

Undeterred, Qihoo decided to take the issue to the Supreme People’s Court. At the beginning of this month, both sides made arguments. Now, the Supreme People’s justices must deliberate and ultimately rule on the definition of “Internet Marketplace.”

One of The First Big Monopoly Lawsuits Since China’s 2008 Anti-Monopoly Law

The Qihoo versus Tencent showdown is significant not only for its impact on Internet law, but because it is one of the first major anti-monopoly cases to be heard since China passed its 2008 anti-trust law. As such, the case is expected to set precedence.

A law Professor at Peking University explained to the press that Chinese anti-trust law considers 3 elements:

  1. Whether or not an entity is unfairly blocking competitors;
  2. Whether or not government intervention is a factor;
  3. Whether or not barriers to entry of a given industry are low.

A widely followed case in the People’s Republic, many folks want the court to hold a public hearing to solicit opinions about Tencent’s alleged dominant market position. As you might imagine, smaller Internet companies in China are dying to weigh in on the issue.

If this case resolves like the Google monopoly investigation, Tencent will get a slap on the wrist and a stern warning to watch itself. If the Supreme People’s Court sides with Qihoo, perhaps Chinese technology companies will start seeking greener pastures to grow.

Blogger Defamation: Help! I Can’t Afford A Lawyer!

defamation-attorneyAccording to the Media Law Resource Center in New York, over the past several years courts have handed down $17.4 million in blogger defamation trial awards. So it’s no wonder we here at Kelly Warner Law are often asked, “I’m being sued for blogger defamation, but I don’t have the money to defend myself. Do I have options?” So without further ado, let’s get to the answer.

Represent Yourself In A Blogger Defamation Case

If you can’t afford an attorney, the most obvious solution is self-representation, or in legal argot, pro se representation. If you want to go the pro se route for your blogger defamation case, you may want to check out this link, this link and this link.

When you represent yourself, it’s not a bad idea to consult an attorney before heading into court. An hour consultation won’t break the bank, and it could save you from losing over a simple error.

Check If Your Insurance Covers Legal Fees

Believe it or not, some insurance policies cover lawyers’ fees. Typically, standard homeowner’s insurance packages don’t cover blogger defamation lawsuit costs, but “excess liability” packages often do. Additionally, some insurance providers will cover legal costs via homeowner’s insurance if the insured party pays an additional $200 to $350 annually. Check with your provider to see if it offers such a deal.

Another caveat enforced by some insurance companies of which you should be aware: no coverage for intentional acts or business websites.

Many bloggers procure affordable legal insurance through blogging associations. If you belong to one, inquire. If you don’t belong to one, consider doing so.

You May Be Able To Afford Legal Counsel

Don’t underestimate your ability to afford an attorney. For starters, your situation may not require lots of litigation. In fact, a simple letter may do the trick – and that won’t cost you much. Moreover, if you have a “can’t lose” case, your opponent could very well be ordered to pay your legal fees.

If you want to consult a blogger defamation lawyer, contact Aaron Kelly.

UK Online Defamation Notice and Takedown Rules

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The UK online defamation notice and takedown rules have arrived!

Well folks, we’re on the precipice of a whole new UK defamation law. Parliamentarian Lords and Commoners bestowed their approval, and have since been drafting guidelines.

Online, political borders are constantly crossed. As such, people everywhere have been speculating about how the notice and takedown system will work under the new UK libel statute.

And finally, the wait is over. Below is a “just the facts” rundown of the UK online defamation notice and takedown procedure. We’ll leave judgment for another day.

A Super Brief Summary of the Website Operator Defense in the 2013 UK Defamation Law

Section 5 of the 2013 UK defamation law outlines a defense for website operators similar to safe harbor protections afforded under United States Section 230 of the Communications Decency Act.

The UK Section 5 defense can be defeated if:

  1. The website operator can’t show who posted the offending statement; or
  2. The website operator fails to follow the notice and takedown procedures.

Below is a step-by-step outline of the UK online defamation notice and takedown procedure. Bookmark it for reference.

Step One of the UK Online Defamation Notice and Takedown Procedure: Sending A Complaint & Notifying The Poster

A takedown complainant must include the following information:

  1. Name and email address;
  2. Statement in question and why its defamatory;
  3. Explanation of the meaning the claimant derives from statement;
  4. Explanation of the exact unsupported false statements of fact or opinion;
  5. Where statement is posted;
  6. Explanation of why the claimant can’t contact the poster directly;
  7. Statement of whether or not the claimant consents to his or her name and email being released to the poster.

Dealing With An Incomplete Complaint Notice

If a website operator receives an inaccurate or incomplete notice of complaint, he or she must still treat it like a valid notice. Additionally, website operators only have 48 hours to inform the complainant that his or her notice is insufficient and why.

Defense Busting Opportunity: Failed To Respond In A Timely Manner

If the complainant eventually wants to mount a defense against a website operator for not complying with the notice and takedown system, the complainant must prove the website operator didn’t respond in a sufficient amount of time.

Step Two of the UK Online Defamation Notice and Takedown Procedure: Website Operator Alerts Poster of the Complaint

Operators have 48 business hours to inform posters of a complaint. However, courts have the authority to say whether or not a notification was executed in a relevant time frame.

If the website operator can’t contact the poster, he or she must remove the material in question. Additionally, the operator must notify the complainant within 48 hours that the material was removed on account of not being able to reach the poster.

If the poster can be reached, the operator has 48 hours to:

  1. Alert the poster by sending a modified version of the notice, which redacts the name and email of the complainant if the complaint indicated that they did not want to be known to the poster.
  2. Inform poster of the 5-day deadline for response and warn of removal if he or she doesn’t reply. The website operator must also explain that the poster has two options:
    • Consent to removal; or
    • Object to removal, in which case the poster must provide a name and postal address, regardless of whether or not he or she consents to having their contact information passed on to the complainant.
  3. Write a statement indicating that he or she will not reveal the poster’s contact information unless the poster consented to do so or court ordered.
  4. Send the complainant a written acknowledgement explaining:
    • If the statement was taken down;
    • How the complaint was communicated to the poster
Defense Busting Opportunity: Failed To Collect Poster’s Contact Information

Perhaps the most dubious aspect of the UK online defamation takedown and notice system is the user contact requirement. If a website operator does not maintain proper records, so to speak, the “bad books” become grounds for invalidating the operator’s defense.

Step Two of the UK Online Defamation Notice and Takedown Procedure: Poster Tells Website Operator To Keep or Remove Statement

Posters have until midnight at the end of the day specified in the notification to respond, “which must be the 5th day after the notification is sent.” The five-day period does include weekend and bank holidays.

When contacted by a website operator, the original poster has three options:

  1. Ignore;
  2. Instruct the website operator to remove the offending statement;
  3. Instruct the website operator to keep the statement up.

If the poster ignores the notice, the website operator must remove the material. If the poster instructs the website operator not to remove the statement, but refuses to reveal his or her contact information to the website operator, then the website operator must remove the material.

Step Three of the UK Online Defamation Notice and Takedown Procedure: Website Operator Analyzes Poster Response and Notifies Claimant

If the poster doesn’t provide the proper information, or “the operator believes [the information provided] is obviously false,” the operator must take down statements and notify the claimant within 48 hours.

If the poster agrees to take down statements, but the claimant wants to pursue action, the claimant must apply for a court order to get the poster’s contact information from the website operator. The website operator is required to have the information on hand, but they are not required to hand it over unless a court so orders.

If the poster says, “keep it up,” then the operator must hand over the poster’s contact information if he or she consented to its release. If the poster refuses to reveal their identity to the claimant, the claimant must obtain a court order if he or she wants to pursue the matter.

Step Four of the UK Online Defamation Notice and Takedown Procedure: Actions For Repeat Offenders

If the same poster makes similar comments on the same website repeatedly, and one round of takedown request has already occurred, then the website operator must remove the comments – regardless of whether or not a formal complaint is sent – within 48 hours.

If all goes according to plan, under the new UK defamation law, the longest a potentially defamatory statement can remain online is nine days.

It’s A Defamation Free For All Down In India!

An online defamation lawsuit out of India is making international headlines.
An online defamation lawsuit out of India is making international headlines.

Discussion of international defamation cases here at the Kelly Warner law blog usually revolves around the United Kingdom and Canada. But today we’re taking a quick trip to another part of the Commonwealth, India.

A political defamation saga with online implications, the case between the Aam Aadmi Party and two media outlets – India TV and Media Sarkar – is making headlines. (Rob Ford who!?)

Sting Operation Video Results In Defamation Lawsuit

The defamation debacle started when Media Sarkar (think The Huffington Post of India) orchestrated a sting operation against the  AAP party. If you believe Media Sarkar, what resulted was a video showing an AAP member knowingly accepting “black money” as a campaign contribution.

Needless to say, Media Sarkar posted the footage online and India TV aired it.

WHAT IS BLACK MONEY?

“Black money” is money made on the black market. Since it’s not procured legally, it’s also not taxed. Black money is a big problem in India. It’s estimated that Indian citizens have a cumulative $2 billion in black money currently being held in Swiss bank accounts.

A he-said, she-said hubbub soon followed. Representatives from the AAP insisted the copy of the hidden camera video provided by the Election Commission was different from the one that aired on India TV. In other words, the AAP swears the media outlets altered the footage, and that the video did not “depict the AAP or its candidate indulging in any kind of illegal activities.”

So now the AAP is suing Media Sarkar and India TV. To make matters more complicated, the head of Media Sarkar filed a defamation counterclaim against the AAP over disparaging SMS comments made by party supporters.

Yes sir-e, a defamation stew is surely a’brewing down in India. We’ll be keeping our eyes on this one.

More International Defamation Law

If you want to learn more about international defamation laws, click on over to our International Defamation Law Database. If you need an international defamation law attorney, get in touch here.

Arizona’s AG Is Suing Citizens: Deserved or Dumb Move?

Arizona Seal
Arizona’s AG is on a defamation warpath.

Arizona Attorney General Tom Horne is crying defamation, y’all. The state’s polarizing legal chief filed an action against the Arizona Public Integrity Alliance (AZPIA) – a citizen watchdog organization – over an advertisement on the group’s Facebook page. In the ad, AZPIA claimed Horne was under investigation by the FBI. It also highlighted Horne’s failure to remunerate a $400,000 fine handed down for inappropriate campaign fundraising.

Horne insists, however, that the group has their facts messed up. The attorney general points out that, technically, he is no longer the subject of an FBI investigation. As a result, he’s suing for defamation.

Questionably, Horne filed as a private citizen despite being a public official. Can he do that? Well, yes, he can do it. But the question is: will it work?

Horne Is An Attorney General; Can He Claim To Be A Private Person For The Purposes of This Defamation Suit?

Under Arizona defamation law, the standard for defamation is different for public and private figures. In short, public figures (celebrities, elected officials, high-ranking government executives) must satisfy the actual malice standard to win a defamation suit – meaning the “famous” plaintiff must prove the defendant knowingly lied or acted with reckless disregard for the truth.

The problem Horne will run into here is that the statements under review are direct criticisms of Horne’s role as attorney general.

In the United States, political heckling is practically a national sport. As such, it’s tough to see how a judge will allow Horne to present his case as a private citizen.

Can Horne Win This Defamation Case?

Now, if a judge doesn’t dismiss the case, does Horne have a shot at winning? It’s iffy. If he can prove material loss that resulted directly from a false statement of fact made in the ad, then sure, he’s got a shot, in theory. That said, the statement under review must be materially false, not just a small error. Also dampening the AG’s chances is the fact that Horne was under FBI investigation at one point. Moreover, AZPIA did make an effort to remove the material in question after Horne had contacted the group and explained the slight error.

But hey, you never know. We’ve not been able to read the actual filing, so it’s impossible to weigh in on the merits of Horne’s case. But judging from available media reports, it looks as if this one will be an uphill battle for Horne.

Can Businesses Enforce Contract Defamation Clause In Customer Agreements?

contract defamation clausesIn 2010, Jen Palmer’s husband ordered her a “desk toy” from Klear Gear. It never arrived. Eventually, however, the Palmers got a refund. Nevertheless, they added a negative review to Klear Gear’s Ripoffreport page after not being able to connect with a customer service representative from the company.

After venting their feelings online, presumably the Palmers got back to their lives. Then, out of the blue, two years post-incident, the couple received an official letter in the mail. It was from Klear Gear, and the company was demanding that the Palmers pay $3,500 for violating a non-disparagement clause in the customer contract.

WHA!?!?! Yeah, that’s what the Palmers said, too. But sure enough, Klear Gear’s “buyer’s contract” prohibits customers from trashing the company “to ensure fair and honest public feedback and to prevent the publishing of libelous content in any form.”

A Customer Contract That Forbids Online Defamation

The agreement asserts that Klear Gear has “sole discretion” to determine what violates its defamation clause. Under the contract, consumers are given 72 hours to remove the material. If it remains, the negative reviewer is billed $3,500 for “legal and court fees until such complete costs are determined in litigation.” The letter goes on to state that if the bill is not paid in 30 days it would be passed on to a collection agency.

Are The Palmers In Trouble? Can A Company Legally Include A Defamation Clause In A Contract?

According to reports, the Palmers are in a pinch; both the $3,500 fine Klear Gear ask and the $2,000 Ripoffreport fee to remove bad reviews are beyond their bank account. So what’s a couple to do?

Actually, the Palmers are sitting pretty. Here’s why:

  1. The contract defamation clause on which Klear Gear is basing their claim was not a part of the agreement when Palmer made the purchase back in 2010. A business can’t retroactively enforce this provision.
  2. It is highly likely that a judge will deem the clause “unconscionable” and unenforceable.

Other Businesses Have Tried and Failed To Enforce Contract Defamation Clauses

This is not the first time a company has tried to stave off negative online press by way of a questionable contract . Last year, Medical Justice, a company specializing in doctor defamation protection, tried to institute a contract wherein patients relinquished all copyrights to their online reviews of a given doctor. The theory went that if a patient posted a negative review, then the doctor could simply claim copyright infringement and get the negative content removed via a DMCA take down request.

In the end, judges laughed Medical Justice’s contract out of court and the company no longer offers it.

RipOffReport Lawyer

Are you stuck in the middle of a Ripoffreport defamation battle? Do you need to speak with a Ripoffreport defamation lawyer? If so, contact Kelly Warner Law. We’ve handled a multitude of Ripoffreport defamation cases – for both claimants and defendants – and have a deep understanding of how the platform responds to issues of defamation.