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Does California’s Amended Online Privacy Law Mean We All Have to Change Our Privacy Policies?

When it comes to privacy policies, I usually tell clients they need to comply with California law.  Beginning January 1, 2014, California is adding a new wrinkle we all need to consider.

If you comply with California’s law, you can be confident you have satisfied most of the requirements for other states.  Plus, California’s laws apply to any California consumer who visits your site or uses your mobile app regardless of whether you are based on San Francisco or San Antonio.  In fact, California’s current law requires a privacy policy for all websites that retain any type of information which is one of the reasons we all have basic privacy policies in the first place.

California recently passed an amendment to the California Online Privacy Protection Act (CA OPPA) that will require online and mobile websites to disclose how they respond “do not track” requests.

For most of our clients, we recommend the privacy policy simply provide that you don’t disclose the user’s information to anyone else although you may use cookies or other technologies to track where users came from and where they go.  As long as the website operator did not sell the information, a basic disclosure like that was usually sufficient.

What are the new requirements for my relatively basic website?

If you have a basic website that merely retains IP addresses and basic information, it is not clear whether you need to change your policy.  Rather than live with the doubt, it makes sense to go ahead and comply with the new disclosures.

The ambiguity is there because the law only applies to use of personally identifiable information (PII).  If you aren’t keeping PII, then no need to worry.

So, what is PII?

The law defines PII as “individually identifiable information about an individual consumer collected online by the operator from that individual and maintained by the operator in an accessible form, including any of the following: (1) A first and last name; (2) A home or other physical address, including street name and name of a city or town; (3) An e-mail address; (4) A telephone number; (5) A social security number; or (6) Any other identifier that permits the physical or online contacting of a specific individual.”

The California Attorney General says she defines PII as “any data linked to a person or persistently linked to a mobile device: data that can identify a person via personal information or a device via a unique identifier. Included are user-entered data, as well as automatically collected data.”

If the AG enforces the law in a way broader than the definition in the statute, an IP address would be covered by the statute.  Therefore, we are recommending that almost all websites should add the required disclosures than live with the ambiguity.

What do I have to disclose?

The amendment is about disclosure and not action.  You do not have to change your behavior and honor do not track requests — you simply have to disclose what you do about it.  It’s a middle ground that requires disclosures, but does not prevent advertisers from tracking or targeting ads or retaining and using any PII.

But I rely upon on my outside marketing firms. . . 

The new law also applies if your site allows third parties such as ad networks to collect PII. You have “to disclose whether other parties” collect PII regarding a consumer’s “online activities over time and across different Web sites when a consumer uses the operator’s Web site or service.”  It means you also need to know what your marketing firms are doing.  If you have Google AdSense ads on your site or use the service yourself to place ads on other sites, you have to make the disclosure–not your outside marketing firm.

So, what if I don’t change?

If you violate CA OPPA, even if you are not based in California, the California Attorney General can bring a civil action against you or someone in California can bring a class action lawsuit against you.  Granted, you will receive a notice of noncompliance and have 30 days to fix it, but why wait for the notice of non-compliance?  Amend your privacy policies now disclosing what you do, if anything, about do not track requests.

 

Facebook “Like” is Protected First Amendment Speech

I don’t often make predictions on legal outcomes, so when I do and I get it right, it’s worth sharing.  In May, we talked about whether “liking” a candidate would constitute protected speech under the First Amendment.  A district judge in Virginia ruled it was not.  The Fourth Circuit Court of Appeals recently reversed in Bland v. Roberts.

In that case, a jailer in Virginia liked his boss’s opposition during a campaign for sheriff. The incumbent won and the plaintiff was fired. The sheriff said it was for competency issues, but the plaintiff said retaliation was the motivating factor for the termination.

I wrote back then that “it seems like a slam dunk case for our fired jailer,” before describing the district court’s dismissal based on the judge’s opinion that “liking” something on Facebook did not amount to a “substantive statement” worthy of protection.  Both the lunacy of the idea of liking a candidate on Facebook not being considered “substantive” enough to warrant protection and the questions asked during the appeal according to this Bloomberg report, I wrote, “I would put my money on a reversal.”

Winner, Winner Chicken Dinner! 

Reversing, the Fourth Circuit compared liking on Facebook to putting a campaign sign in your yard.  “On the most basic level, clicking on the ‘like’ button literally causes to be published the statement that the User ‘likes’ something, which is itself a substantive statement.”

It is not likely your “like” will get you fired and set up a Supreme Court case. The lesson, however, is to be careful of making employment decisions based on what you see on Facebook.  The issue is more problematic for public employers, but as we have discussed before even non-union private employers need to make sure their social media policies and employment decisions do not upset the NLRB. ”Liking” a complaint from a co-worker about working conditions cannot be the basis of a termination.  In some states, it is illegal to fire someone for engaging in protected speech.  ”Liking” Coke when you work at Pepsi in an at will state, like Texas, can still probably get you fired.

Can I use the social media image for my story – part 3

In part one, we discussed how fair use may apply to the media’s use of social media images.  In part two, we looked at how the various sites’ terms of service come into play.  Today, we look at the one prominent case in this area and describe some best practices.

 The Agence France-Presse Twitter Case

There is just one well-known case involving the media’s use of social media images.  Agence France-Press and the Washington Post both used images of the Haitian earthquake put on Twitter by photographer Daniel Morel.  A judge rejected AFP’s argument that it could use the images because they were put up on Twitter.  The Twitter terms of service did not provide that the photographer gave his rights in the images away or grant anyone else the right to use the images outside of Twitter.  After denying AFP’s motion for summary judgment, the case, as far as I can tell, is still pending.

Best Practice

1.   Make sure it’s legit

It’s easy to get duped.  Jimmy Kimmel showed us that.  This is more a producer/editorial function rather than legal, but it’s worth noting here.

2.    Get permission

The good news about social media is that it makes it easy for you to reach out to ask permission.  You don’t need any magic language and you don’t need a lawyer to draft anything for you.  Send the person who posted the image – “Hi, I’m the producer, we are considering using this image.  Did you take it and would you mind if we used on the news?” It is not uncommon for there to be a small payment, but most amateurs won’t ask.

3.     Make sure you have permission from the right person

In the AFP case, AFP did reach out and tried to get a license to use the images.  They just did not get them from Morel — the actual photographer.  The AFP staffer saw the images on Twitter and reached to the account where the staffer saw them.  Unfortunately, that person had already lifted them from Morel’s account.  AFP then distributed the images to Getty and Morel was not pleased.   You can read more about the facts of the case here.  For those of you who want some more legal beef on the case, check out Professor Goldman’s post here.

4.     Don’t make promises in your request or box yourself in

Because of fair use, you don’t have to ask for permission.  Even if they say no, you might be able to use it.  Therefore, don’t send a message that implies you are only going to use it if you obtain their permission or suggests that you have to have it.  My example above would be fine.  Sending a message that says: “We have to hear from you soon to know whether we have your permission” implies it’s a requirement and could be used against you if there is a trial later.

5.     Attribution

If you are unable to get permission, then you should at least provide attribution.  Many amateurs would be satisfied with a little notoriety from the attribution.  Attribution won’t get you out of a lawsuit if they get mad, but it may help show you were acting in good faith or alleviate any anger so the person reconsiders whether they really want to file a lawsuit.

The Poynter Institute’s Adam Hochberg wrote an article titled “Twitpic, Flikr Use by Eyewitnesses Raises Questions for News Orgs About Image Rights, Compensation” that includes a good discussion of these issues.  According to the article, the Associated Press requires editors to contact all “citizen photos” and verify each image for both authentication and permission.  The article provides several ideas for an image policy and some of the issues involved.

What is the real harm?

The main point of this series has been to avoid any liability and provide some guidance and good practices.  I am not saying the minimal likely harm should be part of the decision-making process as to whether you violate a copyright.  When dealing with fair use, there is risk, but it is usually not a huge risk.  Assuming it is a close call (and you are not scooping or stealing some paparazzi images of the Royal Baby), you are likely looking at having to pay either actual damages or statutory damages.  The actual damages could be the market rate for the license to use the image.  The statutory damages, on the other hand, are between $750 and $30,000 per work.  If the fair use analysis is a close call and you use best practices, you are likely to be on the lower end of the statutory damages.  In the AFP case, the court ruled he damages would be assessed on each image used by AFP and not on each time it was subsequently downloaded or used after AFP sent it to Getty.  Whether you multiply $5,000 times 8 or 8,000 makes a huge difference.

If you mess it up, your biggest liability is likely going to be the bad P.R. and your legal bill.

Can I use the social media picture for my story? – Part Two

Last time, we looked at whether the media can use images from social media sites applying fair use to several typical situations.  Today, we look at the specific terms of service of various popular sites to see if some make it easier than others for the media to use images.

Facebook:

Plain English:  Each user allows Facebook, and only Facebook, to do what it wants with the images subject to the privacy settings.   It gives no others any rights through its terms.  Facebook could sublicense to the image to you, but I have not heard of this being done for the purpose of news reporting.  As we discussed last time, the fact that someone puts up the image for the world to see can help with the fair use argument.

Twitter:

In plain English:  The same as Facebook.  Interestingly, Twitter includes a “Tip” section where it says:  ”This license is you authorizing us to make your Tweets available to the rest of the world and to let others do the same.”  There is certainly no issue retweeting images and posts, but the “tip” seems to be more broad because it would allow the media to repost images and posts off of the Twitter platform.  The Twitter terms do not expressly allow that, but this language could help argue it does.

Twitter also reserves the right to sublicense whatever is provided, specifically allowing Twitter to make it available to other media and platforms without any compensation to the user.  The tip says:  ”Twitter has an evolving set of rules for how ecosystem partners can interact with your Content. These rules exist to enable an open ecosystem with your rights in mind. But what’s yours is yours – you own your Content (and your photos are part of that Content).”

While this is certainly not a green light to re-use images from Twitter, it could help a media outlet argue fair use.

LinkedIn

Plain English:  The terms contemplate that your images on LinkedIn may be copied, but they do not expressly allow it.  The terms warn “[a]ny information you submit to us is at your own risk of loss.”

Pinterest

Plain English:  The site had its own copyright issues in the past.  It tries to make it clear that anything a user submits is meant to be shared as much as possible.  The terms say: “You grant Pinterest and its users a non-exclusive, royalty-free, transferable, sublicensable, worldwide license to use, store, display, reproduce, re-pin, modify, create derivative works, perform, and distribute your User Content on Pinterest solely for the purposes of operating, developing, providing, and using the Pinterest Products.”  This means they want you to share what you find on Pinterest, but only share it on Pinterest — not the front page or the 5:00 news.  

Pinterest has a section called “More simply put” that says “if you post your content on Pinterest, it still belongs to you but we can show it to people and others can re-pin it.”

Vine

Plain English:  Vine is allowed to sublicense content, but there is nothing that allows the general public to do whatever it wants with the videos.

Instagram

Plain English:  Instagram may sublicense the images, but there is nothing in these terms that would specifically allow the media to use the images.

Up Next

In our conclusion of this series, we will discuss a couple of cases and talk about the best practices.

 

Can I use the social media picture for my story? – Part One

The answer is one that frustrates people the most — it depends.  In most circumstances, you run the risk of violating the copyright of the person who took the picture, so the best practice is to seek permission first (more on that in part 3).  But, let’s assume you can’t get permission — after all, you are on a deadline.  So, let’s look at three different scenarios and the “fair use doctrine.”

The Fair Use Doctrine 

The most common response you hear from the journalist is that I’m a reporter so I can use these pictures as a “fair use.”*  Fair use is an affirmative defense to a copyright violation meaning, it is the media’s burden to prove the use was fair.  The Copyright Act specifically lists “news reporting” as an example of what could be fair use.  The Supreme Court, in the one case where it looked at the news reporting fair use angle, ruled that Congress’s inclusion of “news reporting” gives the media a good argument, but there is no presumption that it will always prevail.

Fair use is a factually-specific inquiry and there is no bright line test.  Courts consider these four factors:

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

For most commercial news gathering sites and stations, the courts find they are engaged in commercial endeavors – you sell advertising.  The media usually loses this argument.

(2) the nature of the copyrighted work;

Was this a professional photographer taking pictures to sell to the public or is this a less “artistic” photo already being freely shared with the public?  Most likely, if the photograph is being used for news and it is a simple Facebook photo, this factor will weigh in favor of the media.  The issue of whether the image, in and of itself, is newsworthy also comes into play.

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

This is more applicable to excerpts of videos, books and music and is usually considered a wash when dealing with images.

(4) the effect of the use upon the potential market for or value of the copyrighted work.

This is why you may have heard that as long as it is an amateur’s photo you can take it. That may help you with this factor, but this fact alone will not give you the green light.

The Picture of the Non-Celebrity

Neither a scandalous teacher nor, alas, a lottery winner

The local schoolteacher is caught in a scandal with a student.  Or, let’s be positive for once, the local man wins the lottery.  You need a picture of the person so you turn to Facebook or LinkedIn.  Why not just grab it? After all, they put it on the site for the world to see.

First, you want to check the terms of service from the social media site where you found the image (that’s #2 in this series).  I am not aware of a case where an average citizen has sued the media (as opposed to the school district for using an image in an what not to do presentation) for using their Facebook picture.  This is good and bad in that no one has ever ruled you should not use the image, but no one has said it is 100% OK either.

Assuming the license from the social media platform’s terms of service do not give the general public the right to do whatever they want with the image, you should go through the fair use analysis.

Fair Use Factor 1:  Media outlets that take advertising are engaged in commercial activities although the primary goal may be to educate the pubic.  Unless, you are a public interest group or non-profit, you are likely going to come out on the wrong side with this factor.

Fair Use Factor 2:   The more the image itself is newsworthy, the more likely the media will be able to use it.  If the image is one of the teacher with the student that is subject of the scandal, then that image is newsworthy and more likely a fair use.  If the picture shows the subject engaged in the activity related to the story, then it is more likely a fair use.  Also, the further away your purpose of using the image is from the original purpose of the image, the more likely you can use it.  For example, in cases where images from a brochure were used in a news story about Oliver North and his new endeavor and nude modeling pictures of a pageant winner distributed prior to her win were both considered fair use because, in part, the media’s use was different from the original purpose and the images were newsworthy.

Fair Use Factor 3:  This issue is usually a wash because still images require, for the most part, use of the whole thing or at least the key part of it.   The media may be able to say they only used one image out of a large portfolio or album from a social media profile, but this argument has not been made in court to my knowledge.

Fair Use Factor 4:  If the image is from a professional or a free lancer, you are going to lose this battle.  For example, a local Los Angeles station used video of a beating shot by an independent journalist without permission destroying that independent journalist’s ability to license the video for money.  Would the same apply to a Facebook image?  If we are talking about the typical profile picture, usually put up by amateurs for as wide dissemination as possible without any thought to the market value, then the media would probably prevail with this part of the argument.  If the scandal-ridden teacher has pictures  of her and the student she is not able to immediately hide, she could make an argument that because of new events, there is a market for the now sought-after pictures that she could provide on an exclusive basis.  On the flip side, someone probably has access to them ruining any “exclusive” commercial value.

As you have probably figured out by now, there are a lot of factors that go into the analysis and you would be foolhardy to have a hard and fast rule.  This analysis is simply to give you an idea of what issues come into play.  The decision should ultimately be made by the editor/news director, and if there is time, legal.

The Breaking News From Twitter

Almost everyone has phones with cameras and almost everyone has access to social media. Therefore, you will see a lot more “breaking news” caught by everyday citizens who post the images.  I even took an image of a fire and posted it to Facebook from my office.  Again, assuming you don’t have permission, we have to look at the fair use factors.

Fair Use Factor One:  Same as above.

Fair Use Factor Two:  By the nature of the hypothetical, this assumes the image is newsworthy which would give the media a slight leg up in the analysis.

Fair Use Factor Three: This is usually going to be a wash.

Fair Use Factor Four:  We are assuming these are truly amateurs and not professional who are posting the pictures.  If there are 50 other people near the fire/stand-off/crash/revolution taking pictures and posting them, the less likely there is commercial value to the images.  If, by some dumb luck, the Average Joe is hiking in the woods and sees the first talking moose, then there may be commercial value to the “exclusive” nature of the images.

A moose I saw on a hike. It did not talk.

As you can see, there is still no bright-line rule.

The Picture, Itself, Is Newsworthy

Unfortunately, the compromising image of the politician (thanks Anthony Weiner) is news in and of itself.  The same goes for the nude images of the beauty pageant winner or a news story about an image.   The mere existence of these images is the story.  You can’t tell the story without them.  While this may be the easiest analisys, in can still be perilous.  You most likely will be able to use it, unless someone has an exclusive or there is commercial value to the copyright holder.

For a legal article on this topic from 2011, check out Professor Daxton R. “Chip” Stewart’s article, “CAN I USE THIS PHOTO I FOUND ON FACEBOOK? APPLYING COPYRIGHT LAW AND FAIR USE ANALYSIS TO PHOTOGRAPHS ON SOCIAL NETWORKING SITES REPUBLISHED FOR NEWS REPORTING PURPOSES” in the Journal of Telecommunications and High Tech Law.

*The other common excuse is that the pictures are in the public domain because they were posted on Facebook for the world to see.  That’s just not legally correct unless the specific social media platform says that is the case.  We will examine that in part two.

The Anatomy of a Defamation Claim – Scottie Pippen’s Case is Dismissed

I think Scottie Pippen is one of the most overrated players in the history of the NBA.  My opinion may be soured because I am a Houston Rockets fan and the experiment with him, Olajuwon and Charles Barkley did not end well.

Of course, that’s just my opinion.  What if, however, I reported, as fact, Scottie Pippen declared bankruptcy when, in truth, he never did?

According to Graydon Head’s Jack Out of the Box blog, Scottie Pippen sued media outlets because of the erroneous reporting, but the case was dismissed by the Seventh Circuit Court of Appeals.  If you are a public figure, take heed — even when the reporting is blatantly wrong, actually recovering may be difficult.  The trial court dismissed the lawsuit because the court did not believe Scottie Pippen proved any damages and failed to prove any “actual malice.”

Damages

If people were going around claiming I was bankrupt when I wasn’t, I would not be happy. Neither was Pippen.  He claimed it defamation per se which means the defamation was of such a nature to be patently harmful to your reputation so that you don’t have to prove any actual damages.   Pippen suggested that claiming he filed bankruptcy implied he could not handle his job.  The court disagreed noting the ability to handle finances did not impugn his ability to do his commentator or spokesperson work.

 Actual Malice

When you are a public figure, you have to show the media engaged in actual malice–which means you have to show the reporter knew or really should have known the information was false.  Pippen argued a simple web search would have revealed whether or not Pippen had filed bankruptcy.   Negligence – or failure to reasonably investigate – does not equal actual malice.

Pippen even proved to some of the media outlets that he did not file bankruptcy and complained that some outlets did not retract the story.  Failure to retract does not equal actual malice.

Also of note, the Seventh Circuit determined Illinois law would likely join the majority position of applying the single publication rule to the Internet.  This means that the statute of limitations begins to run the first time the defamatory content appeared on the Internet.

What Does It Mean?

Yes, the media outlets won, but the victory did not come cheaply.  I am sure they would have preferred to have gotten the facts right then to be dragged through litigation that went to the court of appeals.  The end result in Texas would have probably been the same, but there are certain procedural advantages that may have made the process cheaper and quicker such as the Anti-SLAPP dismissal and the new Texas retraction demand requirements.

Then again, maybe Scottie Pippen wasn’t in this case for the money.  He seems to have publicized the fact that he never did declare bankruptcy and the reports that he did were just wrong.  He may have just wanted to win this one in the court of public opinion.  Now, if he can shake that “only because of Michael Jordan” debate although the numbers and this play should give Pippen some cred.  Maybe, my original opinion was a little harsh.

 

Quick Links – August 2013

Rocky Mountain National Park

Because of an extended working vacation away from Houston’s heat in Colorado, I’ve been away from the blog.  Like my kids gearing up to go back to school, I’m getting back to the normal work mode back in the office while recovering from a separated shoulder from a mountain biking incident (riding across on overpass in Houston is apparently different than actual mountain biking).  As a warm-up, here are a few quick links to interesting stories from the last couple of weeks.

Another Adwords Trademark Dismissal

From Professor Goldman’s Technology and Marketing Law Blog — another unsuccessful keyword advertising lawsuit.  The plaintiff was a collection agency and the defendant was a law firm that bid on the plaintiff’s name that triggered the following ad:

a link titled “Stop Collection Calls—Is Allied Interstate Calling You?” Below the link are two lines of text, the first listing Defendants’ URL, www.creditlaw.com, and the second bearing the slogan “Stop the calls for free!”

Under most circumstances, I would advise clients to avoid using the competitor’s name in the ad copy.  But, this is one of those easy exceptions.  It is clear the law firm is not trying to confuse consumers into thinking the law firm is the same as the collection agency.  It is a pretty easy decision, but a good reminder of how trademark law plays into search engine advertising.

An Eraser Button for Minors on Social Media

Charlie bags his first 14′er — sort of because it was Mt. Evans and we drove most of the way.

We previously mentioned an eraser button for minors on social media.  It appears the California Legislature is also back from vacation which, according to Edwards Wildman’s Digilaw Blog, means the law may be a reality soon.

Hi-Jacked Sites

One of the most difficult things to do is help clients deal with IP theft from pirates outside of the U.S.  Seyfarth Shaw’s Trade Secret Blog provides some tips on how to deal with these issues–assuming you have enough clout to get your state attorney general involved.

Cascade Falls

Don’t let your independent contractor use your email.

Evan Brown’s Internet Cases blog discusses a recent Texas opinion regarding the dangers of letting an independent contractor use the company email.  An independent contractor cannot usually bind a company to an agreement because they don’t usually have the authority.  The company, however, can clothe the independent contractor with the indicia of authority and lead the other party to believe they are dealing with the right person.  One way to do that — have the independent contractor send emails from the company account.

Understanding the law and the government’s 

Sunrise in Grand County, Colorado

To get a good baseline understanding of the law underlying the government’s ability to (store, monitor, read, index, search – you choose the verb) / (phone records/meta data/emails/cell location information — you choose the object of the verb), NPR’s Morning Edition has a good story explaining the 1978 Supreme Court decision that may say all of this is perfectly legal.

Taking Legal Control of the Company Social Media Account

What happens when the employee who set up the company’s LinkedIn account leaves? Or, what happens when your outside marketing firm set up your Facebook page but refuses to give it to you because of a fee dispute?

Be Proactive

Before we talk about what to do in these situations, let’s talk briefly about how to avoid these situations.  Most social media sites allow you to have more than one administrator. You should have, at all times, at least two trusted employees designated as such.  When one of them leaves, or is about to be fired, the remaining administrator changes the passwords to lock out the departing administrator and finds another suitable back up.  The same thing works with your outside marketer — make sure someone (preferably two of you) are co-administrators so you can always have access to the social media account.

You can also contractually determine who controls and owns the social media account and its followers.

Thanks, you’re an hour late and I need to access my account.

If you are too late to implement some safeguard, the first advice is the same we give our children – ask nicely.  This applies to the departed employee and the social media platforms.  Obviously, if you can’t locate the employee or they refuse to give up access, you have to approach the social media networks.  The problem is, historically, they are not nearly as concerned about your page as you are and are not quick to act.

For example, Facebook tells you what to do here.  The problem is Facebook is notoriously slow to react taking about two weeks to respond.  If it is a LinkedIn Group (say company alumni) as opposed to a company profile, you may not be able to take control.  With regard to groups, LinkedIn takes the position groups are created by individual members and therefore they will not transfer ownership or control of a group.  LinkedIn may help you reach out to the group owner or help you protect copyrights or trademarks, but taking control of a Group can be difficult.

The step of last resort – the lawsuit

The law is not settled in this area and there have only been a couple of high profile cases involving LinkedIn and Twitter which had more to do with who owns the followers and connections.

In the LinkedIn case, Eagle v. Edcomm, the court threw out the Computer Fraud and Abuse Act and Lanham Act claims, but allowed the common law claims of misappropriation, conversion and invasion of privacy claims to continue which are still pending.  In the Twitter case, the claims for misappropriation of trade secrets, intentional interference with prospective economic advantage, negligent interference with prospective economic advantage and conversion are proceeding to trial which is expected to take place this week.

It is clear you can sue, but exactly what causes of action apply and the likely result is not yet clear.  As a lawyer, we love to blaze new ground.  As a client, blazing new legal ground is expensive and dangerous.   You should try to avoid it if you can, but know that you can use the courts to seek control of your accounts if you have to.

Special thanks to friends Michelle Price and the MMI Agency for helping me help others with some of these issues recently.

TheDirty.com held liable despite Section 230 of the Communications Decency Act

TheDirty.com is not exactly deserving of sympathy.  Much like Playboy and Hustler pushed the boundaries of the First Amendment in the past, rumor sites like TheDirty.com are pushing the limits of Section 230 immunity for online defamation under the Communications Decency Act.

A judge and jury in Kentucky apparently have had enough.  This week, a jury found TheDirty.com “encouraged the development of what is offensive” and was therefore liable for the defamatory posts about former Cincinnati Bengals cheerleader Sarah Jones. The jury awarded Jones $38,000 in actual damages and $300,000 in punitive damages.

As a refresher, Section 230 of the CDA provides:  ”[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”  Because the websites are not the publisher or speaker, the sites can’t be liable for defamation.  Most courts immediately dismiss website operators from defamation suits when the claim is based on user generated content known as UGC.

Although subjects of defamatory posts hate the CDA, the law is good.  There would be no Google, YouTube, Twitter of Facebook if these sites had to defend, let alone be held liable for, each defamatory post by their users.

Jones sued Dirty World Entertainment Recordings which owns TheDirty.com.  The site, as expected, immediately filed a motion to dismiss the complaint because all claims were based on the UGC.   The trial judge denied the motion arguing the defendant purposefully seeks out and encourages defamatory content.   The court wrote “the very name of the site, the manner in which it is managed, and the personal comments of defendant Richie” shows that the site “specifically encouraged development of what is offensive about the content.”  Therefore, the summary judgment was denied.  With TheDirty.com as a defendant, it is not surprising the jury ruled in favor of Jones.

If you have had the unfortunate reason to visit TheDirty.com, you know the judge is correct in that they do everything they can to encourage defamatory and offensive content. I have argued before that the CDA should be amended to allow for claims against sites like this that encourage defamation.  I always thought the change would come through the legislative process rather than judicial fiat.  Not surprisingly, TheDirty.com is appealing. You can read more about the case here.

What does it mean?

If you run Facebook, the local newspaper site, or a community site regarding butterflies, you still have nothing to worry about.  If you purposefully run an inflammatory site, you need to pay attention to what the court of appeals does with this case.

TheDirty.com asks people to “submit dirt.”  Their submission form has entries for the “dirt,” and provides a link to upload photographs.  The court seized on the fact that in response to the post about Jones, the site operator wrote “I love how the Dirty Army has a war mentality.”  Facebook and the Christian Science Monitor website don’t do this.

The CDA is usually a slam dunk defense for websites that are sued over UGC.  Plaintiffs first tried to argue the sites actually “created” the content.  Now, plaintiffs will argue the sites are “encouraging” the defamation.  While a good policy, I am not sure it will hold up on appeal without a change to the statute by Congress.

So, what about sites like RipOffReport and PissedConsumer.com?  Is the next line of attack that they “encourage” defamatory content?  I would not be surprised if a plaintiff is making that argument right now in response to a motion to dismiss.

We will keep our eye on the appeal.

2013 Texas Leg Watch: Retracting the defamation and notification after a data breach

While the second special session is winding down (thank goodness), we will take a look at a couple more new laws impacting online media and technology in Texas.  While most of the attention was on social media password protections, service via social media and online “compelled prostitution” legislation,  two additional bills made it through to become law.

The Defamation Mitigation Act

The first was HB 1759 called the Defamation Mitigation Act, often referred to as the Retraction Statute, which became law as of June 14, 2013.  The purpose of the law is to encourage people who feel they have been defamed to demand a retraction and allow publishers to do it.

Here ‘s how it works.  A plaintiff has to notify a publisher about an allegedly defamatory statement within 90 days of learning about it.  If a plaintiff fails to do so, they may not be able to seek punitive damages or bring suit until this process takes place.  The statute lays out the specifics about what needs to be in the notice including a particular statement identifying the defamatory statement and when and where the publication was made.  The publisher then has 30 days to correct the mistake by publishing a correction, an apology or the prospective plaintiff’s own statement.

The retraction must be  ”published in the same manner and medium as the original publication or, if that is not possible, with a prominence and in a manner and medium reasonably likely to reach substantially the same audience as the publication complained of.”  There is a detailed process about challenging the sufficiency of the correction.

If the plaintiff fails to follow this procedure, or the publisher takes corrective action within 30 days, the plaintiff can still sue, but can no longer seek punitive damages unless the plaintiff can show actual malice.  If the plaintiff files suit without sending the notification, there is also a process that would allow the defendant to abate the case and allow for the process to take place.

The law is codified at Texas Civil Practice & Remedies Code, § 73.051–.062.

Data Breach Notification

The Legislature also amended the Texas data breach notification law with SB 1610 so that companies have to notify consumers regardless of state of residence and regardless of whether the state of the consumer has their own breach notification law.

Texas law already required all Texas businesses to notify any individual whose sensitive personal information was, or is reasonably believed to have been, acquired by an unauthorized person pursuant to the state law of the individuals.  The amendment makes it easier for businesses to follow the Texas law or to make the notification pursuant to the law of the individual’s state — as long as the business does one or the other.  This closed the hole that allowed businesses to avoid the notifications for residents of states who don’t have notification laws and business concerns that they would have to follow and know the laws of 50 states.

To be safe, businesses should make their best effort to comply with the Texas notification requirement for all individuals regardless of residence.

This new law, called the “Notification Required Following Breach of Security of Computerized Data,” is codified at Section 521.053(b-1) of the Texas Business and Commerce Code.