Topic: Legal

Legal side of Reputation Management

Court Enforces Arbitration Clause in Amazon’s Terms of Service–Fagerstrom v. Amazon 0

This lawsuit alleges that Amazon overstated the extent of discounts it offered customers (in stating the extent of the discount customer achieved when shopping at Amazon versus competing retailers). Amazon moved to compel arbitration, and the court grants the motion. The efficacy of arbitration clauses in online terms of service agreements is an evergreen topic of interest, so although it was decided in late October I thought the case was worth noting.

The court agrees with Amazon that Washington law applies. Plaintiffs argued for application of California law, but were unable to point to a fundamental conflict between the laws of the two states.

The terms are not illusory. The agreement reserved the right for Amazon to make changes at any time and without prior notice. Plaintiffs argued that this rendered the agreement illusory. The court disagrees, and says that Amazon has agreed to arbitrate disputes as to products purchased. This obligation remains unchanged and cannot be altered by a later revised term. Additionally, Amazon is bound by the duty of good faith. So even if it can alter the agreement freely, this right is subject to limitations.

The terms are not undermined by procedural unconscionability. Plaintiffs raised three main arguments in support of procedural unconscionability:

  • the text of order affirming agreement to the terms were not sufficiently prominent
  • the arbitration clause was buried because it was included in a longer document that was only linked
  • the arbitration clause incorporated a set of AAA rules but were vague about which ones were incorporated

These arguments get no traction.

The terms were not substantively unconscionable: Plaintiffs’ substantive unconscionability arguments similarly failed. The court previously addressed plaintiffs’ argument that the unilateral right to amend rendered the agreement illusory. In addition to this, plaintiffs raised two other arguments.

First, plaintiffs argued that the carveout from the arbitration clause for intellectual property claims was one-sided, and in effect allowed Amazon to litigate the claims that were most important to it, while forcing consumers to arbitrate claims that were most important to them. The court finds this unpersuasive, noting that customers include rightsowners who may litigate intellectual property disputes against Amazon. Second, even if this represented some imbalance, this wasn’t a provision that shocked the conscience. It was within the realm of the typical give-and-take in a contract.

Second, plaintiffs focused on a provision voluntarily limiting Amazon’s right to seek attorney’s fees unless the arbitrator found the claims were frivolous. The court rejects this as well. First, it re-states state law on this point. Second, Washington law has a mandatory reciprocal fee provision, so whatever the effect of this provision, plaintiffs get the benefit of it as well. Finally, the provision does not limit plaintiffs right to seek fees in any way.

Although the court finds that it is not “a paragon of consumer protection” it says the agreement is not unconscionable.


To insulate arbitration clauses against unconscionability arguments, companies include a range of “customer-friendly” terms in arbitration clauses. These include, for example, provisions regarding payment of filing fees (which can be expensive comparatively in arbitration), carve-outs for small claims actions, flexibility as to the locale of the proceeding, and ability to participate remotely. Companies also have to elect the type of arbitration procedures (i.e., what flavor of the tribunal’s rules) that apply. Amazon’s terms included many of these provisions and the court cites to them approvingly.

Two other aspects of the terms that were worth noting:

  • Companies almost always include some sort of carveout to arbitration clauses (to allow them to go to court, to police against infringements and abuse of the site). Consumers don’t seem to get a ton of mileage out of using these carveouts to argue unconscionability.
  • The terms require adjudication of claims on an individual basis. Plaintiffs did not appear to focus on this provision, which is perhaps indicative of how accepted they have become and how difficult they are to attack.

Amazon’s terms are fairly simple and user-friendly. Kudos to them for that. That said, I’m surprised they still don’t take a conservative route on two points we’ve flagged a bunch here: (1) including “we can amend any time” clauses (which I think could be made much more palatable by making any such change prospective only) [Eric’s comment: but the clause bit Amazon’s subsidiary in the ass in 2012, so either Amazon hasn’t fixed their contract yet or they are gambling that ruling is an outlier, which paid off in this case], and (2) not forcing customers to check the box (this came back to haunt Zappos, but strangely, Amazon does not insist on it—perhaps a choice made by their all-knowing UI folks).

This ruling is worth contrasting with the Uber arbitration rulings. I failed to blog those due to their length, but the rulings by Judge Chen in that case are worth reviewing. A big difference between that case and this one is that the Uber case involves employees, which makes enforcement somewhat trickier (and courts more sympathetic). Even an opt out clause did not save Uber’s arbitration clause.

In the end, drafters of terms of service agreements should pay close attention to arbitration clauses. It may be tempting to include some stock arbitration provisions as an afterthought, but this is not a good idea, as they are sure to be picked apart down the road.

(The ruling has been appealed.)

Case citation: Fagerstrom v. Amazon, Inc., 15-cv-96 BAS (S.D. Cal. Oct. 20, 2015)

Related posts:

The “Browsewrap”/”Clickwrap” Distinction Is Falling Apart

What’s a Browsewrap? The Ninth Circuit Sure Doesn’t Know–Nguyen v. Barnes & Noble

23andMe’s Browsewrap Fails, But Its Post-Purchase Clickthrough Works Anyway–Tompkins v. 23andMe

Facebook’s “Browsewrap” Enforced Against Kids–EKD v. Facebook

Judge Can’t Decide if Facebook’s User Agreement is a Browsewrap, But He Enforces It Anyways–Fteja v. Facebook

Gmail Terms of Service Apply to reCAPTCHA During Account Formation–Rojas-Lozano v. Google

Jawbone Plaintiff Can Invoke California Choice of Law Provision in Service Agreement

If You’re Going To Incorporate Online T&Cs Into a Printed Contract, Do It Right–Holdbrook v. PCS

Clickthrough Agreement Upheld–Whitt v. Prosper

‘Flash Sale’ Website Defeats Class Action Claim With Mandatory Arbitration Clause–Starke v. Gilt

Some Thoughts On General Mills’ Move To Mandate Arbitration And Waive Class Actions

Second Circuit Says Arbitration Clause in Terms Emailed After-the-Fact Not Enforceable – Schnabel v. Trilegiant

Users Can’t Sue Sony for Changing Online Terms to Require Arbitration – Fineman v. Sony Network Entertainment

Qwest Gets Mixed Rulings on Contract Arbitration Issue—Grosvenor v. Qwest & Vernon v. Qwest

Zynga Wins Arbitration Ruling on “Special Offer” Class Claims Based on Concepcion — Swift v. Zynga

Second Circuit Enforces Terms Hyperlinked In Confirmation Email–Starkey v. G Adventures

If You’re Going To Incorporate Online T&Cs Into a Printed Contract, Do It Right–Holdbrook v. PCS

Clickthrough Agreement Upheld–Whitt v. Prosper

Source: Eric Goldman Legal

Woman That Rapper 2 Chainz Called a “THOT” In Viral Video Loses Lawsuit–Chisholm v. Epps 0

Tauheed Epps is a rapper known as “2 Chainz”. While backstage at one of his concerts, he allegedly filmed plaintiff while walking around backstage with his entourage, and repeatedly called her a “THOT” (which stands for “That Hoe Over There”). The video, which was posted using the #isthatyothot hashtag, went viral and allegedly generated millions of views. As a result, plaintiff claims she was fired from her job and suffered embarrassment, public ridicule, inability to find employment, and mental anguish. She sued, asserting claims for defamation, IIED, and deceptive trade practices. Unfortunately for her, she proceeded pro se.

The incident occurred in early 2014, and she was fired from her job on April 3, 2014. North Carolina has a one year limitations period for defamation claims. Although she filed the lawsuit in March 2015, due to a snafu with the summons and service of the summons, the lawsuit was not deemed commenced until June 2015. As a result, her defamation claim is time-barred.

This left the IIED and deceptive trade practices claim. The court says that “mere insults” are not sufficient to support an IIED claim, and the court says 2 Chainz’s conduct does not rise above this level. The deceptive trade practices claim is “devoid” of any factual allegations. Even keeping in mind the liberal standards applicable to pro se plaintiffs, the court says it’s insufficient.


This could have been a case with interesting angles from the publicity rights standpoint, but it fizzled due to procedural snafus (and plaintiff’s pro se status). On the one hand, the case presents questions about what type of consent someone in 2 Chainz’s position should procure. On the other hand, as Judge Kozinski said in reference to another case, “[i]n the Age of YouTube, there’s no need to take [either party’s] word for it”. TMZ posts a link to the video and it does not shed a sympathetic light on plaintiff’s case. (The court surprisingly did not highlight the video.) The backstage area has a restricted entry but there are a lot of people there; 2Chainz (or his crew) says the episode will be posted online; and plaintiff at times hams it up for the camera (even offering up her instagram handle). Hard to not view that as implied consent.

The court’s conclusion that filming someone, calling them a “hoe”, and publishing the video for the world to see is not outrageous will raise some eyebrows. Maybe that conduct does not fit the court’s definition of outrageous, but I can certainly see reasonable minds disagreeing on that point.

TMZ’s coverage: “2 Chainz Victorious in “THOT” Lawsuit

Case citation: Chisholm v. Epps, 3:15CV291 (W.D.N.C. Nov. 30, 2015).

Related posts:

Plastic Surgeon’s “Before & After” Photos Violate NY Publicity Rights–Manzione v. Mashkevich

Gossip Site That Uses Misidentified Photo May Be Liable for Publicity Rights Violation — Edme v. Internet Brands

Lindsay Lohan Loses Publicity Rights Claim Against Pitbull Over Song Lyrics–Lohan v. Perez

TheDirty Defeats Publicity Rights Claims–Gauck v. Karamian

Manuel Noriega Loses Right of Publicity Suit Against Activision (Guest Blog Post)

Republishing MySpace Post in Local Paper Might Be Intentional Infliction of Emotional Distress–Moreno v. Hanford Sentinel

Source: Eric Goldman Legal

Google Play Defeats Lawsuit Over Unauthorized Bank Charges–Harvey v. Google 0

Photo credit: "Check the bank statement and balance the account" // ShutterStock

Photo credit: “Check the bank statement and balance the account” // ShutterStock

In March 2013, Susan Harvey bought a game via Google Play, which required her to electronically link her bank account. She alleges that hundreds of unauthorized charges hit her bank account, totaling thousands of dollars. Google allegedly offered to make her whole, but she sued Google anyway, alleging that because “‘Google failed to implement and maintain reasonable security procedures and practices,’ hackers ‘obtain[ed] her Information and…post[ed] fraudulent transactions on Plaintiff«s̈ account.’” Her primary claim was under the Electronic Funds Transfer Act (the EFTA, 15 U.S.C. § 1693) with several ancillary state claims.

This turns into a surprisingly easy case. The EFTA has a one-year statute of limitations. The unauthorized charges allegedly started April 15, 2013 and ran through May 2014. Harvey discovered the problem in August 2014 and filed her complaint April 15, 2015. The court says that EFTA statutes of limitation caselaw is “sparse” but concludes that it started ticking on April 15, 2013, when the first violation allegedly occurred. That meant she needed to file suit by April 15, 2014, which she missed by a year. Harvey argued that each unauthorized charge reset the period, but the court rejects that argument based on other EFTA caselaw.

She also argued that the limitation period should be tolled until she discovered the issue in August 2014. The court shows zero sympathy, noting that she alleged there were 1000 unauthorized charges which would have all shown up on her bank account statements. Thus,

If Harvey had exercised due diligence, she should have discovered the injury either by looking at her Google account or even more simply, looking at her bank statements. It would not have taken much to discover that over the first 12 months of charges, there were hundreds of debits amounting to thousands of dollars on her bank statements.

Having rejected the EFTA claim on statute of limitations grounds, the court declines to exercise supplemental jurisdiction over the state law claims, sending her to state court if she wants (and assuming she won’t have further statute of limitations problems). Given that it’s not clear how she suffered any financial harm from the unauthorized charges, it’s unclear how much progress she’ll make on the other claims if she keeps pursuing them. For now, I’m putting this case into the category of privacy/security lawsuits where the plaintiff suffered no harm, so what exactly is the fight about?

For those of you celebrating, MERRY CHRISTMAS!

Case citation: Harvey v. Google, 2015 WL 9268125 (N.D. Cal. Dec. 21, 2015). The complaint.

Source: Eric Goldman Legal

When Does A Parody Twitter Account Constitute Criminal Identity Theft?–Sims v. Monaghan 0

Plaintiff, while he was in custody, created a fake Twitter account in the name of “Frank Zamiara” with the user name “LitlZeezy”. The account “was meant to act as the voice and alter ego of [an] abusive deputy.” It was used ostensibly to alert the public to what the plaintiff and others felt was abusive conduct by a real life deputy named Michael Zamiara. Plaintiff sent letters to his girlfriend, who then posted the information as tweets from LitlZeezy. Jail officials were alerted (in September 2009) to plaintiff’s social media efforts in the course of screening his outgoing mail. As a result, he was placed in the special housing unit under “administrative segregation” for 22 days.

Monaghan, an ADA, was assigned to investigate possible criminal charges against plaintiff. He allegedly got the process started. Peglow, an investigator, filed a felony complaint charging plaintiff and his girlfriend with identity theft, criminal impersonation, and conspiracy. The complaint did not mention that the Twitter account was in the name of “Frank,” not “Michael,” Zamiara. The complaint generally alleged that the tweets made Zamiara out to be a racist and included numerous racially charged terms. Zamiara filed a supporting deposition in connection with the complaint. He alleged that the tweets were supposed to appear as if they were from him and that “someone . . . assumed [his] identity online.”

A lawyer for plaintiff moved to dismiss the criminal charges, and in response, Monaghan stated that the reference to “Frank” rather than “Michael” was a typo. Monaghan sought leave to amend on this basis. The criminal case did not move forward after this.

Later, in 2010, plaintiff appeared in court on unrelated criminal charges, and another ADA cited to the still-pending identity theft charges as justification for why plaintiff should be denied access to judicial diversion. ADA Monaghan eventually tried to secure an indictment on the identity theft charges, but the grand jury dismissed the charges.

Some years later, plaintiff, proceeding pro se, brought a slew of claims against the investigator, deputy, and the ADAs, Most were dismissed on the court’s initial screening of the complaint. What remained was plaintiff’s claim for malicious prosecution. The court finds it lacking.

Claims against the prosecutors and the jail deputy: Plaintiff’s claims against the prosecutors fail because they are barred by (absolute) prosecutorial immunity. While the complaint intimated that one of the ADAs functioned in a role other than as an advocate (i.e., as an investigator), the complaint lacked credible allegations in this regard.

The jail deputy (Zamiara) argued that he couldn’t be held liable because he did not “initiate” the prosecution, but the court disagrees. However, the court does say that the deputy is entitled to judgment on the pleadings because probable cause is a total defense to a claim for malicious prosecution.

The identity theft charge: The court says that probable cause existed as to the identity theft claim because plaintiff utilized an item of the deputy’s personal information (broadly defined under New York law to include a person’s name and place of employment) in the Twitter account. While plaintiff’s stated intent was to act as a whistleblower, the court says a reasonable person could have concluded plaintiff possessed an intent to defraud (i.e., cause loss to the Zamiara, who testified that the posts “[c]ould have caused him to lose over two thousand dollars in lost salary and benefits if his employers had believed the posts were made by him”).

The criminal impersonation charge: The court similarly says probable cause supported the charge of criminal impersonation. The statute broadly defines impersonation as “act[ing] in . . . [an] assumed character with intent to obtain a benefit or to injure or defraud another.” A separate part of the statute specifically references communications where someone “pretends to be a public servant in order to induce another to submit to such authority or act in reliance on such pretense.”

The conspiracy charge: Probable cause was satisfied as to the conspiracy claim because plaintiff worked with his girlfriend to set up the Twitter account.

Claims against the investigator: Finally, the court dismissed the investigator on qualified immunity grounds. Even if probable cause “did not actually exist, officers of reasonable competence could disagree on whether the probable cause test was met.”


Ugh. A thin-skinned public official who overreacts to at best a parody social media account, and at worst a means of blowing the whistle on bad conduct. We’ve seen similar examples of such overreactions before. (See, e.g., Matot v. CH; Perez v. Tedford.) And here, it looks like the plaintiff suffered some serious consequences as a result.

Identity theft and criminal impersonation statutes are incredibly overbroad. There’s no way a parody account should satisfy the elements, but we’ve seen attempts to shoehorn such activity into these types of statutes before. And the court here, bending over backwards to give defendants the benefit of the doubt, says it’s possible the plaintiff’s actions constituted identity theft and criminal impersonation.

The court had a couple of opportunities to appoint a lawyer for the plaintiff, who was proceeding pro se, and declined. I’m not sure how much of a difference it would have made but it was disappointing to see the court not take the opportunity to appoint counsel. This looked like a colorable case, and one where the court could have benefited from having a well-developed presentation on the plaintiff’s side.

Eric’s comment: As Venkat indicates, this case has important parallels to In re Rolando S, where a high schooler was convicted of identity theft for logging into a classmate’s Facebook account and posting inappropriate sexual content in her name. The identity theft elements were stretched in that case, but this court’s stretching is even more problematic because of the parody Twitter account’s obvious political and advocacy functions. Indeed, an Illinois court invalidated parts of an identity theft statute because of its obvious overreach into ordinary online conduct. Identity theft can be a terrible crime, but legislatures and prosecutors need to tread extra carefully to make sure they are sanctioning only true identity theft, not a panoply of everyday online activities where pretending is involved. The prosecutors in this case weren’t nearly so careful, and they are really lucky they found a sympathetic judge.

Case citation: Sims v. Monaghan, 13-cv-6496-FPG (W.D.N.Y. Dec. 21, 2015)

Related posts:

Creating Parody Social Media Accounts Doesn’t Violate Computer Fraud & Abuse Act – Matot v. CH

Police Officers Lean on School to Fire Social Worker for Facebook Post–and May Have Violated First Amendment

Logging Into Someone Else’s Facebook Account and Posting Messages on Their Friends’ Walls Could Be Identity Theft — In re Rolando S.

Employee’s Claims Against Employer for Unauthorized Use of Social Media Accounts Move Forward–Maremont v. SF Design Group

Accessing Ex-girlfriend’s MySpace Account and Posting Offensive Content Results in Conviction

Griping Patient Goes Too Far Posting Fake Content in Doctor’s Name–Eppley v. Iacovelli

Mortuary Student Can Be Disciplined for Facebook Posts–Tatro v. University of Minnesota

Suspension for Facebook/YouTube Rap Video Critical of High School Coach Does not Violate First Amendment – Bell v. Itawamba County School Board

Racy Teen Photos Posted to Facebook Are Constitutionally Protected Speech–TV v. Smith-Green

Mortuary Sciences College Student Disciplined for Threatening Facebook Posts–Tatro v. University of Minnesota

Student Loses First Amendment Fight To Call School Officials “Douchebags” After Four Years Of Litigation–Doninger v. Niehoff

Nursing School Can’t Expel Students for Posting Photo to Facebook–Byrnes v. Johnson County CC

Sending Politically Charged Emails Does Not Support Disturbing the Peace Conviction — State v. Drahota

Private Facebook Group’s Conversations Aren’t Defamatory–Finkel v. Dauber

Third Circuit Schizophrenia Over Student Discipline for Fake MySpace Profiles

Private High School Not Liable for Cyberbullying–DC v. Harvard-Westlake

Nursing Student’s Blog Post Doesn’t Support Expulsion–Yoder v. University of Louisville

Principal Loses Lawsuit Against Students and Parents Over Fake MySpace Page–Draker v. Schreiber

Court Upholds Student Suspension For YouTube Video of Teacher

Teenager Busted for Creating Fake “News” Story

Source: Eric Goldman Legal

Are Legal Restrictions On Disparaging Personal Names Unconstitutional?–In re The Slants (Guest Blog Post) 0

By Guest Blogger Laura Heymann

[Eric’s introduction: Prof. Heymann has spent more time thinking about the Law of Naming People and Things than anyone else I know. I asked her to weigh in on the potential implications of the Federal Circuit’s Tam decision (The Slants decision) for restrictions on personal names. Her thoughts:]

textonlyThe Federal Circuit’s decision in In re Simon Shiao Tam will, no doubt, be the subject of much commentary in the weeks to come. As readers have no doubt already learned, the majority held that the portion of 15 U.S.C. § 2(a)–that prohibits the registration of a trademark if it “may disparage . . . persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute”–is facially unconstitutional under the First Amendment.

Tam had sought to register THE SLANTS as the trademark for his Asian American rock band in an attempt to “reclaim” the word, and it was this expressive function of trademarks that led the majority (and for Judge Dyk, as applied to Tam’s case) to hold that regulation on the basis of the mark’s meaning could not be justified.

I’ll leave it to others to explore the implications of the court’s holding for other areas of trademark law, including the additional section 2(a) prohibitions that are not based on deception or confusion, as well as trademark defenses such as descriptive fair use. For now, I want to highlight the ways in which the Federal Circuit’s holding can have equal application to courts’ consideration of personal name change petitions.

(Personal names are not the only area potentially implicated by the Federal Circuit’s reasoning: Consider, for example, 46 C.F.R. § 67.117, part of the Vessel Documentation Act of 1980, which prohibits names that “contain [or are] phonetically identical to obscene, indecent, or profane language, or to racial or ethnic epithets.”)

As I’ve discussed previously on this blog and elsewhere (Naming, Identity, and Trademark Law), personal names have at least three functions. A name’s denotative function allows us to refer. A name’s connotative function is what makes naming a creative act — it allows the namer to suggest gender, class, religious or historical connections, or other characteristics. Naming is in this way also a demonstration of power, as in when a nickname or disparaging group name is given to another. And a name also has an associative function in that it signals a connection to a group or family.

As with trademarks, no official recognition is required to establish a name — use and adoption by others is what validates a name. And so when courts are petitioned for official recognition, many will claim — as the PTO has typically done with trademarks — that the process is largely ministerial, and that the only role that the court should play is to ensure that the name change won’t cause fraud or deception.

In the past, however, some courts have grappled with their unease at being asked to register a name that is offensive or otherwise objectionable and have used the discretion granted to them by statute to deny such petitions. A California court affirmed in 1992 a lower court’s denial of a petitioner’s request to change his name to a racial epithet because, in part, it concluded that granting the request would be seen as “promoting racial disharmony.” Similarly, a New Mexico court in 2008 affirmed a lower court’s denial of request to change the petitioner’s name to “[F***] Censorship!”

As the Federal Circuit has now confirmed, however, these decisions should be seen as unconstitutional. As with trademark registration, a court’s approval of a name change petition isn’t itself government speech or otherwise an imprimatur; accordingly, to approve some requests and deny others based on the meaning of the proposed name constitutes viewpoint discrimination.

It’s true that reported decisions denying name change petitions appear to be waning. Judges have become more accustomed to the fluidity of identity over time and to the desire to have one’s name reflect that identity. But some petitioners may never get to the courtroom, discouraged by court websites that continue to tell applicants that they cannot petition for a name that is “bizarre, unduly lengthy, ridiculous, or offensive,” as both the New York state court system’s website and the Utah state court system’s website do. (This is simply a different version of what Elizabeth Emens described as “desk-clerk law.”) The Federal Circuit’s opinion may inspire those courts to take a fresh look at how the information they provide shapes the public’s understanding of the First Amendment.

Eric’s Comments:

* The Federal Circuit is often castigated as an IP maximalist court, so it’s tempting to dismiss this ruling as just the Federal Circuit once again expanding trademark’s boundaries to greenlight more trademark registrations. Perhaps an IP maximalist impulse steered the majority in that direction, but I see this ruling as actually a really savvy pro-free speech ruling. Can the government deny government benefits to prevent “disparagement”? No, that clearly would be a government effort to suppress socially disfavored speech, and the Federal Circuit fully recognized the law’s censorious implications. I’m especially impressed that the court wasn’t phased by the venerability of this decades-old statute.

* Historically, the Patent Office denied patents on the grounds that the inventions were immoral (a paradigmatic example was gambling machines). That moralistic streak died out decades ago, for good reason. Preserving morality isn’t a proper government function, and the government never will do a good job implementing such amorphous standards. I see this ruling as wiping out the analogous principles in trademark law. (The court makes it clear that it isn’t opining on the statutory restrictions against registering scandalous or immoral marks, though I think the court’s logic should apply equally to those statutory terms).

* I’m sure judges aren’t looking forward to the coming legal battles over trademarks using indelicate terms. It’s hard to maintain judicial decorum when socially disfavored phrases shows up dozens of times in each party’s brief.

Source: Eric Goldman Legal