Social media sites are transforming not only the daily lives of consumers, but also how companies interact with consumers. Here at Morrison Foerster, across all of our practice groups, we are seeing complex, cutting-edge legal issues arising out of social media. As with the Internet boom during the mid-to-late 1990s, social media is generating new legal questions at a far faster pace than the law’s ability to provide answers to such questions. In an effort to stay on top of these emerging issues, and to keep our clients and friends informed of new developments, Morrison Foerster publishes this blog devoted to the law and business of social media.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.Aaron’s practice focuses on advising both established and emerging companies in a variety of data- and technology-intensive sectors, including software, SaaS, cloud-based technology, digital media (social media, AR/VR, gaming, streaming media, AdTech), AI, healthcare, consumer electronics, e-commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on branding and marketing, trademark licensing, and content-related transactions, as well as the intellectual property aspects of mergers, acquisitions, asset spin-offs, and private equity investments.He has represented clients such as Autodesk, Meta, OpenAI, Splunk, Konami, Kaiser Permanente, SoftBank, Visa, and Yahoo, among others.Aaron has been recognized by numerous publications for his work on market-defining technology transactions. He is currently ranked by Chambers USA for “Technology Transactions.”Aaron also serves as co-editor of Socially Aware, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics. Aaron is also a sought-after speaker on new and emerging areas of law, and is a frequent presenter and panelist at conferences and legal services programs. In addition to his active practice, Aaron regularly provides pro bono assistance to various nonprofit and charitable organizations such as Common Sense Media and the Starlight Children’s Foundation. He is a member of the board of directors of California Lawyers for the Arts.While in law school at the University of California, Berkeley, Boalt Hall School of Law, Aaron served as executive editor of the California Law Review and was elected to the Order of the Coif. Following law school, Aaron served as law clerk to the Honorable William H. Orrick and the Honorable Martin J. Jenkins, both United States District Judges for the Northern District of California.

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Partner

Aaron is the chair of our Technology Transactions Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals. Aaron’s practice focuses on advising both established and emerging companies in a variety of data– and technology–intensive sectors, including software, SaaS, cloud computing, AR/VR, AI, gaming, healthcare, consumer electronics, social media, e–commerce, other online business models, and mobile applications. He also maintains an active practice counseling companies on the intellectual property aspects of mergers, acquisitions, asset spin–offs, and private equity investments.

Aaron P. Rubin

Lawrence Gallick is of counsel in the firm’s Austin office and a member of the Technology Transactions Group.Lawrence focuses his practice on technology transactions and licensing matters. His diverse experience includes advising on SaaS agreements, cross-licensing agreements, research and collaboration agreements, development agreements, and distribution agreements. He counsels a broad range of companies across the software, hardware, life sciences, biotech and FinTech spaces, as well as other entities including universities.He advises clients in connection with general corporate matters including contract negotiations, and leasing and technology placement agreements.Lawrence also serves as co-editor of <a href="https://www.sociallyawareblog.com/" target="_blank">Socially Aware</a>, the firm’s award-winning newsletter and blog devoted to the law and business of social media, and regularly publishes on various IP and technology-related topics.Prior to joining the firm, Lawrence was counsel at another major law firm. Before earning his law degree, Lawrence was a web consultant, project manager, and web developer in Portland, Oregon, where he managed and consulted on projects using industry methodologies and performed custom development and integration of content management systems.Lawrence was named a Super Lawyers “Rising Star” in 2015 and 2018–2022, and is licensed in both California and New York. Lawrence earned his J.D. from the University at Buffalo School of Law, where he was the electronic systems editor for the Buffalo Law Review and awarded the ABA-BNA Award for Excellence in the Study of Intellectual Property Law.

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Lawrence Gallick

Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster.Anthony advises clients on general commercial and transactional matters. He regularly advises companies on the IP aspects of their M&A transactions. His clients include technology, digital media and content for television and music, financial services, and communications companies with diverse intellectual property assets and issues.His practice focuses on the legal aspects of developing, licensing, and commercializing technology and intellectual property, as well as negotiating general commercial contracts, including outsourcing transactions, as well as content and data licenses. He regularly assists clients with legal issues relating to licensing and commercialization of digital media and content, digital content that is distributed over the Internet or streamed, mobile applications and social media, as well as the licensing of recorded music for distribution via digital platforms. Anthony is also experienced with issues relating to open-source software, software development, artificial intelligence and machine learning, cloud-based technology, and protection of proprietary information.Anthony has extensive experience working on matters involving disruptive technologies, such as blockchain. He has helped fintech clients with general intellectual property issues in connection with terms of service for online financial products and services.Anthony is an integral part of the outside pro bono legal team for nonprofit organizations based in New York, including advising clients on legal issues regarding entertainment, social media, privacy rights, and the negotiation of outsourcing and service agreements. Anthony received his J.D. from the University of Michigan Law School in 2009. He received his B.S. from Cornell University in 2004.

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Anthony Ramirez is a partner in the Technology Transactions Group in the New York office of Morrison Foerster. He advises clients on general commercial and transactional matters. His clients include technology, media, and communications companies with considerable intellectual property assets. His practice focuses on the legal aspects of licensing and commercializing technology and intellectual property, as well as negotiating general commercial contracts. He also regularly assists clients with legal issues relating to mobile applications and social media.

Anthony M. Ramirez

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Socially Aware is devoted to the law and business of social media, proactively addressing emerging issues and keeping our clients informed of new developments. We cover fields such as artificial intelligence, privacy and data security, Section 230, intellectual property, and much more.

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Lawrence W. Gallick

Social Links: If the Suit Fits

Social Links: Age Verification, X Appeal, and the Great White North

Social Links: Fake Reviews, Real Rulings, and an Epic Fail

Lawrence W. Gallick on Toth v. Everly Well, Inc.

Social Links: Going Back to Cali

In anticipation of preparing rules to implement the California Consumer Privacy Act, the California Attorney General recently <a href="https://oag.ca.gov/privacy/ccpa" target="_blank" rel="noopener">announced</a> six public forums that he will host in January and February 2019 across California.  On January 8, 2019, the AG hosted the first of these forums in San Francisco.  The following provides an overview of the forum and the comments made at the forum.Overview of the January 8, 2019, San Francisco Forum Stacey Schesser, the Supervising Deputy Attorney General for the AG’s Privacy Unit, provided opening remarks.  Ms. Schesser confirmed that the AG’s office is at the very beginning of its rulemaking process.  Although the AG’s office will solicit formal comments after it prepares proposed rules, the AG is interested in receiving detailed written comments from the public with proposed language during this informal period.These forums appear to be designed to inform the AG’s rulemaking and potentially streamline the process, by allowing public input before rules are drafted.  In this regard, Ms. Schesser clarified that she and other AG representatives in attendance at the San Francisco forum were there only to listen to the public comments and would not respond to questions or engage with speakers.  As a result, if the remaining forums follow a similar approach, it is unlikely that the forums will elicit meaningful intelligence regarding the AG’s anticipated approach to, or the substance of, the anticipated rulemaking.Also of note, at the outset of the forum, Ms. Schesser encouraged speakers to focus their oral and written comments on the specific rules that the Act directs the AG to issue:(1)    Categories of Personal Information (PI);(2)    Definition of Unique Identifiers;(3)    Exceptions to the Act;(4)    Submitting and Complying with Requirements;(5)    Uniform Opt-Out Logo/Button;(6)    Notices and Information to Consumers; and(7)    Verification of a Consumer’s Request.It is not clear whether the AG’s encouraged focus for the public comments reflects the fact that the AG intends to limit rulemaking, at least initially, to only those issues where rules are directed by the Act, as opposed to rules under the AG’s general implementing authority.Comments Made at the ForumWhile the forum was well attended and a significant number of individuals pre-registered to speak, only 14 individuals made comments.  Business and trade association representatives (including those from the California Chamber of Commerce, the Network Advertising Initiative, and the California Retailers Association) made ten comments while consumer advocates made four.  Each speaker was given five minutes to speak.Business representatives provided the following noteworthy comments regarding the AG’s rulemaking:<ul><li>Responding to access requests.  Multiple speakers expressed concern that businesses may need to collect more PI than they otherwise would to verify access requests.  Speakers urged the AG to clarify how access requests apply to businesses that do not collect identifying information (or to except such businesses from responding to requests) and to confirm that businesses need not collect additional information or re-identify individuals in order to respond to an access request.</li></ul><ul><li style="list-style-type: none;"><ul><li>Clarifying key definitions.  Multiple speakers asked the AG to clarify various definitions or phrases, including: <ul><li style="list-style-type: none;"><ul><li>“Business.”  The California Chamber of Commerce (CalChamber) expressed concern about the breadth of covered businesses, noting that any business with a website would likely collect PI related to 50,000 or more consumers, households, or devices.  Another speaker requested clarification as to whether the $25 million gross revenue threshold will apply to global revenue or only California-derived revenue and asked the AG to consider a “ramp-up” period for compliance for businesses that previously fell below the revenue threshold but later met the requirement.</li></ul> </li></ul><ul><li style="list-style-type: none;"><ul><li>“Personal information.”  One speaker suggested that the definition of PI should not include IP addresses because businesses could not identify a unique individual or identify individuals over time.  Another speaker urged the AG to clarify or exclude information related to a particular “household” from the definition of PI.</li></ul> </li></ul><ul><li style="list-style-type: none;"><ul><li>“Specific pieces of PI.”  Relevant to the Act’s access obligation, the CalChamber asked the AG to clarify what “specific pieces of information” means and to consider privacy and security issues raised by providing information in response to access requests.</li></ul> </li></ul><ul><li style="list-style-type: none;"><ul><li>“Consumer.”  One speaker asked the AG to clarify whether the definition of “consumer” applies to employee and human resource data, noting that, while “consumer” means “California resident,” the legislative history suggests lawmakers were primarily concerned about customer rather than employee privacy.</li></ul> </li></ul><ul><li>“Sale.”  The Network Advertising Initiative asked the AG to clarify the definition of “sale” and to confirm that interest-based advertising does not constitute a “sale” of PI under the Act.</li></ul> </li></ul> </li></ul><ul><li>Safe harbor provisions.  Several speakers urged the AG to establish safe harbor provisions, such as a safe harbor for GDPR compliance or for businesses that use AG‑prescribed notices.</li></ul><ul><li>Non-discrimination requirements.  Multiple speakers urged the AG to clarify the Act’s non-discrimination provision, and the California Retailers Association specifically requested clarification on how the provision impacts loyalty programs.</li></ul>In addition, consumer advocates requested that the AG consider rulemaking on the following:<ul><li>Categories of personal information.  One speaker urged the AG not to limit the definition of PI and to confirm that the definition includes paper documents.  Another individual asked the AG to confirm that businesses must include the inferences they draw about consumers in the list of “specific pieces” of PI provided in response to access requests and clarify how businesses should share inferences with consumers.</li></ul><ul><li>Non-discrimination provision.  One speaker asked the AG to confirm that businesses cannot charge consumers for exercising opt-out rights, as doing so would disparately impact low-income consumers.</li></ul>Dates and Locations of Upcoming Public Forums The AG will hold two more forums, and information on the time and location can be found on the AG’s <a href="https://oag.ca.gov/privacy/ccpa" target="_blank" rel="noopener">website</a>:<ul><li>Sacramento, Tuesday, February 5, 2019; and</li><li>Fresno, Wednesday, February 13, 2019.</li></ul>Individuals can submit written comments by email to <a href="mailto:privacyregulations@doj.ca.gov">privacyregulations@doj.ca.gov</a> or by mail to California Department of Justice, ATTN: Privacy Regulations Coordinator, 300 S. Spring St., Los Angeles, CA 90013.  Individuals can subscribe to the AG’s mailing list to receive notifications on CCPA rulemaking <a href="https://oag.ca.gov/privacy/ccpa/subscribe" target="_blank" rel="noopener">here</a>.We will continue to provide periodic updates on the forums, the AG’s rulemaking process, and other relevant CCPA developments.  Stay tuned.

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Purvi G. Patel is the former managing partner of the Los Angeles Office. She represents retail, e-commerce, and other businesses in significant advertising, unfair competition, consumer fraud, and privacy 

Purvi G. Patel

Purvi G. Patel defends retail, e-commerce, and other businesses in significant advertising, unfair competition, consumer fraud, and privacy matters. She has built a robust practice defending household names in complex and class action litigation in federal and state courts across the country, winning motions to dismiss, defeating class certification, and securing summary disposition in several multi-million dollar lawsuits. Purvi is a strategic and practical thinker who is in tune with her clients’ priorities, which leads to successful outcomes both inside and outside the courthouse.

Purvi Patel

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Recognized as an authority on financial privacy issues, Nathan helps financial institutions and other companies develop practical solutions for complying with privacy and data security laws. In partic

Nathan D. Taylor

Nathan Taylor

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California Attorney General Holds First California Consumer Privacy Act Public Forum

California AG Hosts Two More Public Forums on CCPA in Riverside and Los Angeles

In anticipation of preparing rules to implement the California Consumer Privacy Act, the California Attorney General recently announced six public forums that h

California Attorney General Holds First California Consumer Privacy Act Public Forum

As we have noted <a href="https://www.sociallyawareblog.com/2016/08/24/hassell/" target="_blank" rel="noopener">previously</a>, the California Court of Appeal’s <a href="https://www.rcfp.org/briefs-comments/hassell-v-bird-1/" target="_blank" rel="noopener">Hassell v. Bird</a> decision in 2016 upholding an injunction requiring Yelp to remove certain user reviews was discouraging to social media companies and other online intermediaries, as well as to <a href="https://www.techdirt.com/articles/20160608/17040434662/another-day-another-horrible-ruling-that-undermines-first-amendment-section-230.shtml" target="_blank" rel="noopener">fans of Section 230 of the Communications Decency Act and proponents of Internet free speech generally</a>. The recent California Supreme Court decision reversing the Court of Appeal was, therefore, met with considerable relief by many in the Internet community.But while the California Supreme Court’s decision is undoubtedly a significant development, it would be premature for Section 230 fans to break out the champagne; the “most important law protecting Internet speech” remains <a href="https://www.sociallyawareblog.com/2016/12/15/the-decline-and-fall-of-section-230/" target="_blank" rel="noopener">under attack from many directions</a>, and this recent decision is far from definitive. But before getting into the details of the Hassell v. Bird opinion, let’s step back and consider the context in which the case arose.Before Section 230: A Wild, Wild WebA fundamental issue for social media platforms and other online intermediaries, including review sites like Yelp, is whether a company may be held liable when its customers engage in bad behavior, such as posting defamatory content or content that infringes the IP rights of third parties. Imagine if Facebook, Twitter, YouTube, and Yelp were potentially liable for defamation every time one of their users said something nasty (and untrue) about another user on their platforms. It would be hard to imagine the Internet as we currently know it existing if that were the case.But that is where we were in the mid-1990s, based on some case law from that period. Think back to the early days of the interactive Web. Online services, like <a href="http://www.internethistorypodcast.com/2014/04/chapter-3-part-1-compuserve-prodigy-aol-and-the-early-online-services/" target="_blank" rel="noopener">Prodigy and CompuServe</a> were the first large-scale attempts to bring an interactive “social” online experience to the public. These services hosted online news forums and offered a safe moderated environment for social networking and discussions. But, of course, users did not always behave well on these platforms.For example, in a New York state case from 1995, <a href="https://h2o.law.harvard.edu/cases/4540/export" target="_blank" rel="noopener">Stratton Oakmont v. Prodigy Services</a>, a user of Prodigy’s Money Talk bulletin board created a post that claimed that Stratton Oakmont (a Long Island securities investment banking firm) and its president committed criminal and fraudulent acts in connection with an IPO. Stratton Oakmont sued Prodigy and the anonymous poster for defamation. The Stratton court held that Prodigy was liable as the publisher of the content created by its users because it exercised editorial control over the messages on its bulletin boards.As you can imagine, this result—that an online service provider is liable as the publisher of defamatory content posted by its users—was alarming to the companies that provided such services. This led to the enactment of the Communications Decency Act, specifically <a href="http://www.columbia.edu/~mr2651/ecommerce3/2nd/statutes/CommunicationsDecencyAct.pdf" target="_blank" rel="noopener">Section 230</a>, a statute that was at the heart of Hassell v. Bird. Section 230 immunizes online service providers from liability stemming from the publication and filtering of content created by a third party. Section 230(c)(1) states that an “interactive computer service provider” (which covers essentially any online service provider) cannot be treated as a publisher or speaker of content provided by a separate “information content provider” (which is often a user). Many Section 230 cases involve defamation allegations against websites based on publication of user-generated content. Courts have generally held that Section 230 immunity applies in these cases and Section 230 is often interpreted broadly.Section 230: The Early DaysThe first major case to interpret Section 230 was a Fourth Circuit case, <a href="http://www.dmlp.org/sites/citmedialaw.org/files/Zeran-4thCircuitOpinion.pdf" target="_blank" rel="noopener">Zeran v. America Online</a> in 1997. In Zeran, an anonymous post on an AOL bulletin board advertised the sale of t-shirts with slogans glorifying the <a href="https://www.cnn.com/2013/09/18/us/oklahoma-city-bombing-fast-facts/index.html" target="_blank" rel="noopener">Oklahoma City bombing</a> (for those too young to remember, this was the domestic terrorist truck bombing of a federal office building in Oklahoma City that killed 168 people, including many children in a day care center).The t-shirts displayed highly offensive slogans such as “Finally a day care center that keeps the kids quiet—Oklahoma 1995.” The post instructed readers to contact plaintiff Kenneth Zeran and listed his home phone number.Zeran, in fact, had nothing to do with the post and was apparently randomly targeted as part of a prank. Zeran began receiving threatening calls. AOL removed the post at Zeran’s request, but similar posts appeared. Less than a week after the initial post, Zeran was receiving threatening calls every two minutes and his house was put under protective surveillance.Zeran sued AOL, alleging that the company was negligent in failing to adequately respond to the posts after becoming aware that they were fraudulent. AOL claimed that it was protected by Section 230. Zeran, however, argued that AOL was not protected by Section 230 because it was a distributor of information, rather than a publisher.The court rejected this distinction between distributors and publishers, holding that Section 230 provided immunity for both the distribution and publication of content and finding that AOL was immune from liability. Today, twenty years later, the Fourth Circuit’s holding in Zeran is still good law. It is not an overstatement to say that, at least from a legal point of view, the Fourth Circuit’s broad interpretation of Section 230 in this case was instrumental in the development of the commercial Internet in its early days.So that is where Section 230 stood for many years—with relatively few exceptions, Section 230 was held to provide website owners with a broad immunity from a variety of claims based on content and information provided by users, even where the content at issue is extremely objectionable. For example, in <a href="http://www.opn.ca6.uscourts.gov/opinions.pdf/14a0125p-06.pdf" target="_blank" rel="noopener">Jones v. Dirty World Entertainment Recordings</a>, the Sixth Circuit held that a gossip website known as “The Dirty” was immune from liability for defamation claims based on posts about Sarah Jones, a cheerleader for the Cincinnati Bengals. The posts included Jones’s picture and statements regarding her sex partners, as well as allegations that she had sexually transmitted diseases. In that case, Section 230 applied notwithstanding the distasteful nature of the content and the fact that the website operator seemingly encouraged the posting of such content.Cracks in Section 230’s ArmorIn the last few years, however, we started to see cracks in Section 230’s armor, with courts more often holding for plaintiffs and finding that Section 230 immunity did not apply in an increasing number of cases. We also saw earlier this year the enactment of a package of laws known as SESTA-FOSTA (known as the “<a href="https://www.congress.gov/bill/115th-congress/senate-bill/1693/text" target="_blank" rel="noopener">Stop Enabling Sex Traffickers Act</a>” in the Senate and the “<a href="https://www.congress.gov/bill/115th-congress/house-bill/1865/text" target="_blank" rel="noopener">Allow States and Victims to Fight Online Sex Trafficking Act</a>” in the House of Representatives), which created an exception to Section 230 related to facilitation of sex trafficking. We noted this trend in a prior Socially Aware blog post and <a href="https://blog.ericgoldman.org/archives/2017/09/debunking-some-myths-about-section-230-and-sex-trafficking-guest-blog-post.htm" target="_blank" rel="noopener">other commentators</a> have written about it as well.Amid that environment in 2016, the California Court of Appeal’s Hassell v. Bird opinion landed with a thud. Decided in the wake of <a href="https://www.sociallyawareblog.com/2016/12/15/the-decline-and-fall-of-section-230/" target="_blank" rel="noopener">a series of cases that had already eroded Section 230’s protections</a>, Hassell v. Bird was seen by the Internet law community not merely as a problematic outlier, but rather as the culmination of a disturbing trend already well underway. But now we are getting ahead of ourselves, so let’s go back and look at the details of Hassell v. Bird.Back to Hassell v. BirdIn 2012, a San Francisco attorney named Dawn Hassell took on a client named Ava Bird in a personal injury case. At some point, the relationship went sour and Hassell withdrew from representing Bird. Bird then posted a review of Hassell’s firm on Yelp.com in January 2013, under the name “Birdzeye B. Los Angeles, CA.” She gave Hassell one star and included various complaints about Hassell’s work in her review. Upon seeing these reviews, Hassell contacted Bird and asked her to remove the reviews from Yelp. Bird refused.Another negative one-star review of Hassell’s firm was posted the next month, this time under the name “J.D. Alameda, C.A.” Hassell had never represented a client with the initials J.D. and she suspected Bird had written this review as well based on similarities in the two reviews’ writing styles.Hassell filed a complaint against Bird in April 2013, alleging that Bird’s negative reviews were defamatory and injurious to Hassell’s business reputation. Bird defaulted and the trial court awarded Hassell more than $500,000 in damages and issued an injunction ordering Bird to remove the Yelp reviews and refrain from posting any additional reviews of Hassell’s firm.So far so good, but here is where the trouble started: The trial court’s injunction also ordered Yelp to remove Bird’s reviews, even though Yelp was not a party in the defamation case.And why didn’t Bird name Yelp as a party? Think back to the Section 230 cases discussed above—Yelp would almost certainly have been able to get a defamation claim against it based on Bird’s reviews dismissed under Section 230. By not naming Yelp and getting a default judgment against Bird, however, Hassell managed to get the court to issue an injunction not only against Bird but also against Yelp, something Hassell would not likely have been able to achieve if she had sued Yelp directly.In any event, when Yelp refused to remove the reviews, the case ended up in the Court of Appeal and, in June 2016, the court <a href="https://www.leagle.com/decision/incaco20160607019" target="_blank" rel="noopener">upheld the injunction requiring Yelp</a> to remove the existing reviews. (The court did hold that the portion of the injunction that ordered Yelp to remove future reviews was an unconstitutional prior restraint.)The Court of Appeal’s decision includes a lot of procedural detail about whether Yelp has standing to challenge the trial court’s judgment and whether a non-party may be bound by an injunction. The court also spends considerable time analyzing Yelp’s due process and First Amendment claims. I am not going to address most of the court’s discussion of those claims because, in this article, I’m focusing on the Section 230 issues. It is worth noting, however, that the Court of Appeal is very dismissive of Yelp’s First Amendment arguments because this dismissiveness seems to color the court’s approach to the Section 230 issues.The Court of Appeal first disregards Yelp’s argument that it has a First Amendment interest in disseminating Bird’s speech as curator of content, similar to a publisher or a distributor of books or newspapers. The court says, in a conclusory fashion, that the injunction “does not treat Yelp as a publisher of Bird’s speech, but rather as the administrator of the forum that Bird utilized to publish her defamatory reviews.” This is a confusing statement because the court does not clearly explain either the difference between a publisher and an administrator of a forum, or why that should matter for First Amendment purposes.The court then goes on to say that, even if Yelp is a publisher, it has no First Amendment interest in publishing Bird’s reviews because the reviews have already been determined to be defamatory and defamatory speech is not protected by the First Amendment. This ignores the fact that, due to the default judgment against Bird, the trial court never determined on the merits that the reviews were defamatory. And, in any event, certainly Yelp never had a chance to challenge that determination.Despite the court’s determinations against Yelp on these issues, however, Section 230 could still save the day for Yelp. But, of course, it doesn’t. Instead, the Court of Appeal says that “[t]he removal order does not violate section 230 because it does not impose any liability on Yelp” and “[i]f an injunction is itself a form of liability, that liability was imposed on Bird, not Yelp.” Of course, Yelp could be subject to liability if it fails to comply with the injunction but, according to the court, “sanctioning Yelp for violating a court order would not implicate section 230 at all; it would not impose liability on Yelp as a publisher or distributor of third party content.”There appears to be a bit of Section 230 sleight of hand going on here. Recall that Section 230 provides immunity against any claim that treats an online service provider as a publisher or speaker of content provided by someone else. Here, the court says, Yelp’s potential liability is not based on treating Yelp as a publisher or speaker of Bird’s reviews; rather the potential liability to Yelp is from being in contempt of court for failing to comply with the injunction. And Section 230, says the court, does not provide immunity from that liability.The trouble with this reasoning, as many commentators noted, is that it opens up a huge loophole in Section 230. If an aggrieved person doesn’t like user content on a website, that person can sue the user. If the user does not appear—which is a pretty good bet, particularly if the suit is filed far from the user’s home—the plaintiff will get a default judgment, just as Hassell did. Then the plaintiff can take the default judgment to the website operator and force it to remove the content, thereby conveniently avoiding Section 230.Yelp appealed to the California Supreme Court. In support of Yelp’s request, amici submitted 14 letters representing more than 40 organizations, including companies such as Google, Facebook, and Twitter, as well as various public interest groups and law professors.The Supreme Court accepted the case and issued its decision on July 2, 2018, reversing the Court of Appeal’s judgment requiring Yelp to comply with the injunction. The Supreme Court voted 3-1-3, with a plurality opinion written by the Chief Justice and joined by Justices Chin and Corrigan, a concurring option written by Justice Kruger, and the remaining Justices dissenting in two separate opinions.Because this article is already quite long, I won’t address all of the points that the writers of the plurality, concurring, and dissenting opinions discussed. Suffice it to say that the plurality opinion turned primarily on Section 230 issues, and did not reach some of the First Amendment, procedural, and due process issues that the lower courts addressed.Essentially, the Supreme Court recognized that the injunction was a way to end-run Section 230. The Court noted specifically that “Yelp could have promptly sought and received section 230 immunity had plaintiffs originally named it as a defendant in this case.” The Court goes on to say, “The question here is whether a different result should obtain because plaintiffs made the tactical decision not to name Yelp as a defendant. Put another way, we must decide whether plaintiffs’ litigation strategy allows them to accomplish indirectly what Congress has clearly forbidden them to achieve directly. We believe the answer is no…. an order that treats an Internet intermediary ‘as the publisher or speaker of any information provided by another information content provider’ nevertheless falls within the parameters of section 230(c)(1).”The Court then makes the key point that an injunction against Yelp does, in fact, treat Yelp as a publisher for purposes of Section 230, noting that the injunction sought to overrule Yelp’s decision to publish Bird’s reviews. The Court goes on to say, “In substance, Yelp is being held to account for nothing more than its ongoing decision to publish the challenged reviews, and that “the duty that plaintiffs would impose on Yelp, in all material respects, wholly owes to and coincides with the company’s continuing role as a publisher of third party online content.” Because this is exactly what Section 230 prohibits, the injunction cannot stand.This result was a relief for many, as noted above, and the plurality opinion has a lot of good language for supporters of Section 230. But given the fractured Supreme Court decision and the fact that Section 230 remains under attack from many other directions, it seems likely that the trend toward reining in the historically broad scope of Section 230 immunity will continue. In any event, we will be keeping a close eye on further Section 230 developments.

Aaron is the chair of the firm’s Technology Transactions Group and co-chair of the Interactive + Digital Media Group. He advises clients on a wide range of complex transactions involving intellectual property and technology, including structuring and negotiating strategic licensing, development, collaboration, procurement, and distribution deals.

Aaron Rubin

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Section 230 Survives to Fight Another Day Following California Supreme Court Decision

Section 230 Survives to Fight Another Day Following California Supreme Court Decision

As we have noted previously, the California Court of Appeal’s Hassell v. Bird decision in 2016 upholding an injunction requiring Yelp to remove certain user rev

On July 19, 2018, in <a href="https://www.courtlistener.com/docket/6155716/24/may-v-expedia-inc/" target="_blank" rel="noopener">May, et al. v. Expedia Inc.</a>, U.S. Magistrate Judge Mark Lane issued a Report and Recommendation recommending that U.S. District Judge Robert Pitman for the Western District of Texas grant a motion to compel arbitration and dismiss a putative class action on the grounds that the plaintiff agreed to the defendants’ website’s Terms and Conditions, which contained a mandatory arbitration clause.HomeAway User Files Putative Class Action HomeAway is an online marketplace for vacation rental properties where property owners can list their properties for rent and travelers can book rental properties. HomeAway’s original business model was to charge owners a fee to list their properties (either on a one-year subscription or pay-per-booking basis) and to allow travelers to search and book rentals for free. HomeAway was acquired by Expedia in 2015 and changed its business model to charge travelers a fee to book rentals in mid-2016. Plaintiff James May had been a property owner who used HomeAway since 2013.In November 2016, the plaintiff filed a putative class action against Expedia and HomeAway for breach of contract, fraud, fraudulent concealment, and Oregon and Texas state law claims based on HomeAway’s imposition of a “traveler fee” and its negative effect on owners who used HomeAway to rent properties. The defendants moved to compel the plaintiff to arbitrate his claims based on HomeAway’s 2016 Terms and Conditions, which contained a mandatory arbitration clause.The defendants argued that the plaintiff agreed to the Terms and Conditions (and thus the arbitration clause incorporated therein) twice:<ul><li>when he renewed his HomeAway subscription in September 2016; and</li><li>when he booked his property through HomeAway’s website in October 2016.</li></ul>The plaintiff argued that he did not agree to the Terms and Conditions because:<ul><li>he renewed his HomeAway subscription in his wife’s name;</li><li>he did not receive actual or constructive notice that he agreed to the Terms and Conditions when he clicked “Continue” during the booking process; and</li><li>any agreement to arbitrate is illusory and unenforceable.</li></ul>Following the Fifth Circuit’s 2018 decision in <a href="http://www.ca5.uscourts.gov/opinions/pub/17/17-50088-CV0.pdf" target="_blank" rel="noopener">Arnold v. HomeAway, Inc.</a>, the parties agreed that the plaintiff’s argument that the arbitration agreement is illusory is precluded and that the only issue before the court was whether the parties entered an arbitration agreement. Magistrate Judge Lane then issued his Report and Recommendation finding the plaintiff contractually bound to the 2016 Terms and Conditions based on his subscription renewal and booking his property through HomeAway.HomeAway User’s Assignment of Account Not Enforceable First, the magistrate judge rejected the plaintiff’s argument that, because he had purchased the renewal subscription in his wife’s name on her behalf and with her authorization, he had not agreed to the 2016 Terms and Conditions on his own behalf. Although the plaintiff specifically renewed the subscription in his wife’s name to avoid being bound by the 2016 Terms and Conditions, he offered no legal argument or basis to show that this had any legal effect.The 2015 Terms and Conditions expressly did not allow the plaintiff to assign the Terms and Conditions absent HomeAway’s consent, and there was no evidence that HomeAway had consented to the purported assignment from the plaintiff to his wife.HomeAway User Was on Notice of Agreement to the Terms and ConditionsSecond, the magistrate judge rejected the plaintiff’s argument that, due to the placement and typeface of the hyperlink used by HomeAway, he had no notice that he was agreeing to the 2016 Terms and Conditions when he booked his property through HomeAway’s website.Magistrate Judge Lane distinguished the 2014 opinion in <a href="http://cdn.ca9.uscourts.gov/datastore/opinions/2014/08/18/12-56628.pdf" target="_blank" rel="noopener">Nguyen v. Barnes & Noble, Inc.</a>, which involved a hyperlink to the terms at the bottom of a webpage and did not require any affirmative action to demonstrate the user’s agreement to the terms. In contrast, HomeAway’s website presented the user with a notice directly above the “Continue” button that informed the user that he was agreeing to the hyperlinked Terms and Conditions by clicking the button to continue. A user could not complete the transaction without clicking the “Continue” button. This was sufficient to put the plaintiff on notice that he was agreeing to the hyperlinked Terms and Conditions by continuing the transaction.HomeAway User Equitably Estopped From Arguing Not BoundFinally, Magistrate Judge Lane noted that, if the plaintiff was not bound by the Terms and Conditions, the plaintiff could gain all of the benefits of his HomeAway account without being bound to terms he did not want to accept. Such a result dictates that even if the plaintiff was not contractually bound, he should be equitably estopped from contending that he is not bound by the Terms and Conditions.HomeAway TakeawayAlthough Judge Pitman has not issued a final order granting or denying the motion to compel arbitration, Magistrate Judge Lane’s Report and Recommendation provides insights into how a website operator can help to ensure that its users are subject to its online contractual terms, even where a user intentionally seeks to avoid being bound by such terms.*       *       *For more on the enforceability of online contracts, please read the following Socially Aware posts: <a href="https://www.sociallyawareblog.com/2016/02/22/clickwrap-browsewrap-and-mixed-media-contracts-a-few-words-can-go-a-long-way/" target="_blank" rel="noopener">Clickwrap, Browsewrap and Mixed Media Contracts: A Few Words Can Go a Long Way</a>; <a href="https://www.sociallyawareblog.com/2016/06/14/scroll-box/" target="_blank" rel="noopener">Terms and Conditions Buried in Easily Ignored Scroll Box Don’t Cut It, the Seventh Circuit Holds</a>; <a href="https://www.sociallyawareblog.com/2016/08/31/court-upholds-enforceability-of-clickwrap-employee-agreement/" target="_blank" rel="noopener">Court Upholds Enforceability of “Clickwrap” Employee Agreement</a>, and; <a href="https://www.sociallyawareblog.com/2015/10/06/three-steps-to-help-ensure-the-enforceability-of-your-websites-terms-of-use/" target="_blank" rel="noopener">Three Steps to Help Ensure the Enforceability of Your Website’s Terms of Use.</a>

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Sneaky Website User Bound by Online Terms of Use’s Arbitration Provision Despite Renewing Subscription in Spouse’s Name

Sneaky Website User Bound by Online Terms of Use’s Arbitration Provision Despite Renewing Subscription in Spouse’s Name

On July 19, 2018, in May, et al. v. Expedia Inc., U.S. Magistrate Judge Mark Lane issued a Report and Recommendation recommending that U.S. District Judge Rober

An advertising executive who lost his job after being named on an anonymous Instagram account is suing the now-defunct account for defamation. The suit names as defendants not only the account—Diet Madison Avenue, which was intended to root out harassment and discrimination at ad agencies—but also (as “Jane Doe 1,” “Jane Doe 2,” et cetera) several of the anonymous people who ran it. Whether Instagram will ultimately have to turn over the identities of the users behind the account will turn on <a href="http://po.st/uSszCx" target="_blank" rel="noopener">a couple of key legal issues</a>.A <a href="https://www.nysenate.gov/legislation/bills/2017/s409" target="_blank" rel="noopener">bill</a> recently passed by the New York State Senate makes it a crime for “a caretaker to post a vulnerable elderly person on social media without their consent.” At least <a href="https://www.techdirt.com/articles/20180614/11230340040/ny-senate-passes-bill-that-would-make-it-crime-to-publish-photos-elderly-without-their-consent.shtml" target="_blank" rel="noopener">one tech columnist</a> thinks the legislation is so broadly worded that it violates the U.S. Constitution. That might be so, but—in light of several <a href="https://www.propublica.org/article/inappropriate-social-media-posts-by-nursing-home-workers-detailed-1" target="_blank" rel="noopener">news reports about this unfortunate form of elder abuse</a> over the last few years—that same columnist may not be correct about the bill likely having been passed in response to a one-time incident.A new law in Egypt that categorizes social media accounts and blogs with more than 5,000 followers as media outlets allows the government in that country to block those accounts and blogs for publishing fake news. Some critics aren’t buying the government’s explanation for the law’s implementation, however, and are suggesting it was inspired by <a href="https://www.reuters.com/article/us-egypt-politics/egypt-targets-social-media-with-new-law-idUSKBN1K722C" target="_blank" rel="noopener">a very different motivation</a>.Critics of the most recent version of the European Copyright Directive’s Article 13, which the European Parliament <a href="https://www.wired.co.uk/article/article-13-eu-copyright-directive-memes" target="_blank" rel="noopener">rejected in early July</a>, brought home their message by arguing that it would have <a href="http://po.st/KK3rc4" target="_blank" rel="noopener">prevented social media users from uploading and sharing their favorite memes</a>.In a criminal trial, social media posts may be used by both the prosecution and the defense to impeach a witness but—as with all impeachment evidence—the posts’ use and scope is entirely within the discretion of the trial court. The New York Law Journal’s <a href="https://www.law.com/newyorklawjournal/2018/06/25/impeachment-by-social-media/?slreturn=20180627185402" target="_blank" rel="noopener">cybercrime columnist explains</a>.To thwart rampant cheating by high school children, <a href="http://po.st/32zB6H" target="_blank" rel="noopener">one country shut down the Internet nationwide</a> during certain hours and had social media platforms go dark for the whole exam period.Snapchat now allows users to unsend messages. <a href="http://po.st/7i8Tpf" target="_blank" rel="noopener">Here’s how</a>.Employees of Burger King’s Russian division recently had to eat crow for a tasteless social media campaign that offered women a lifetime supply of Whoppers as well as three million Russian rubles ($47,000) in exchange for accomplishing <a href="https://bleacherreport.com/articles/2782096-burger-king-sorry-for-food-offer-to-women-who-get-impregnated-by-world-cup-stars?utm_content=inf_1263_2490_2&tse_id=INF_49aaf5e075a311e88fd7d54564f8ca52" target="_blank" rel="noopener">a really crass feat</a>.We’ve all heard of drivers experiencing road rage, but how about members of the public experiencing robot rage? According to a company that supplies cooler-sized food-delivery robots, its’s a thing.

Social Links: Axed exec sues people behind anonymous Instagram account; bill protects elderly from social media exploitation; using social media to impeach witnesses in criminal trials

An advertising executive who lost his job after being named on an anonymous Instagram account is suing the now-defunct account for defamation. The suit names as

Social Links: Axed exec sues people behind anonymous Instagram account; bill protects elderly from social media exploitation; using social media to impeach witnesses in criminal trials