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Aiding and Abetting Prostitution?  Wa?! I’m an Internet Executive – I Sure Hope My Mom Doesn’t Read That!

Aiding and Abetting Prostitution? Wa?! I’m an Internet Executive – I Sure Hope My Mom Doesn’t Read That!

“We opened an investigation at 5:01 on Friday, as promised. . . . We are preparing for a prosecution. We are investigating. We are moving forward. . . . . The #1 defendant is Mr. Jim Buckmaster, who is the man in charge of Craigslist.. . . . Craigslist is a big promoter and facilitator of prostitution.”

South Carolina Attorney General, on Sunday, according to the Craigslist Blog.

Hmmm, this is the kind of thing that is protected by Section 230 of the Communications Decency Act, assuming that the South Carolina AG is referring to third party postings.  Somehow I doubt that Mr. Buckmaster has become a South Carolina pimp.

Apparently, law enforcement authorities in SC have been particularly aggressive in their comments about Craigslist. Why did Craigslist file this suit? The most obvious reason, from a semi-legal perspective, is to get into federal court in that state, rather than be subject to the whims of a state court judge that may not “get” the CDA. After all, SC is south of Mason Dixon, and these guys in California may have seen My Cousin Vinnie one time too many.  And, they be a little unclear on the geography of the American Southeast. Not to mention Easy Rider.

The other reason may just be to fight publicity with publicity, rather than just sit around and take it.

Whether a case like this is procedurally proper, I’m not sure, but I tend to doubt that you can preempt a threatened criminal prosecution that would be brought under state law with a civil action for declaratory relief in federal court.

Antitrust, Followed by Anti-Anitrust Followed by ….

All of the news articles I’m seeing about how aggressive the newly appointed antitrust enforcers may be puts me in a mind to reminisce.

When I graduated law school in 1979 I went off to what was then called Howrey & Simon, at that time the self-proclaimed antitrust heavyweight of D.C., and maybe the entire country. We certainly believed this to be true, and maybe it was. Back then there was no American Lawyer, and no one was really keeping score.

At Howrey it was all antitrust all the time. The firm was involved in massive trials in distant locations – a four month trial in Houston, requiring the rental of suites of condos and an entourage that would challenge a U.S. President and staffed like the U.S. army — was not uncommon; in fact, cases like that were taken for granted. And, according my “law of antitrust litigation” (which is: all antitrust cases must be tried twice, < appeal, > appeal), some of these trials were “seconds. ” The funny thing is, no one seemed to give this state of affairs a second thought -it was just assumed that this was the normal course of events, and as long as Jimmy Carter was in the White House, all was well for antitrust lawyers.

This changed as quickly as the April weather in New England when Ronald Reagan took office – in fact, hiring at the DoJ Antitrust Division pretty much froze in November 1980 (I know, because I was interviewing there) If memory serves me right, many lawyers who were hired by the Antitrust Division during the interregnum between election day and inauguration day had their offers rescinded as soon as Reagan took office. Fortunately for me, I dodged that particular bullet – by then, I was headed back to Boston.

A long winter, an era of “anti antitrust,” had began. Government prosecutions — the lifeblood of many private actions — were shut down and new case filings became scarce. A firm like Howrey wasn’t able to ride the coattails of a government criminal action, or defend against either government cases or civil spinoffs, and the firm entered a period when it was “reinvent or die.” Howrey did reinvent itself, and thrives to this day, but a Dark Age of Antitrust had begun, and it was to last for twelve long years, while Reagan, and then George Bush, were in office.

This was a truly terrible time for U.S. antitrust hawks, but like the desert creatures that are able to hibernate for seemingly impossibly long periods of time waiting for rain, rain eventually did come, and the believers in aggressive antitrust enforcement rose to meet a new spring. Or so they hoped. The Clinton administration did revive antitrust (to Microsoft’s dismay, to mention one victim), but somehow it never got fully back on its feet in the eight years the democrats gave it. It takes a long time to recover from a 12 year dry spell, and eight years just wasn’t long enough. And, truth be told, Bill Clinton wasn’t as much of an antitrust hawk as some might have expected.  Times were good, and no one wanted to rock the boat too much.  And, antitrust economists had to grapple with the implications of the powerful network effects being created in the software and Internet industries.

Yes, there was some action, but nothing like the ’70s.

George Bush’s eight years in office put a quick stop to whatever momentum antitrust enforcement had picked up during the Clinton years. Price fixing prosecutions galore, sure, but not very much of the real thing: Section 2 cases, merger challenges, novel legal and economic theories that lawyers and economists could really sink their teeth into and spend a career arguing over.

So, now that Barak Obama is in office, what will the future hold? One never knows, and although history may rhyme, it never repeats. Google may prove to be a poor substitute for AT&T.  However, you can be sure that a new generation of anitrust lawyers has a careful eye on the Obama administraiton, waiting for a sign – a sign that their time has come. Again.

File Under "Hell Hath No Fury" or, "If You’re Protected By CDA 230, Don’t Waive Your Protection"

Cicilia Barnes’ choice in men was worthy of a Darwin Award. After she broke up with her boyfriend, he created fake personal ads for her on Yahoo and impersonated her on online forums. As the Ninth Circuit described it in Barnes v. Yahoo:

Barnes did not authorize her now former boyfriend to post the profiles, which is hardly surprising considering their content. The profiles contained nude photographs of Barnes and her boyfriend, taken without her knowledge, and some kind of open solicitation, whether express or implied is unclear, to engage in sexual intercourse. The ex-boyfriend then conducted discussions in Yahoo’s online “chat rooms,” posing as Barnes and directing male correspondents to the fraudulent profiles he had created. The profiles also included the addresses, real and electronic, and telephone number at Barnes’ place of employment. Before long, men whom Barnes did not know were peppering her office with emails, phone calls, and personal visits, all in the expectation of sex.

Barnes demanded that Yahoo take the information down, but Yahoo didn’t do so, despite a policy that it would remove fake profiles if the complaining party supported its request with a drivers license. However, attention from the press did get Yahoo to focus, at least for a short while. Again, from the court:

. . . a local news program was preparing to broadcast a report on the incident. A day before the initial air date of the broadcast, Yahoo broke its silence; its Director of Communications, a Ms. Osako, called Barnes and asked her to fax directly the previous statements she had mailed. Ms. Osako told Barnes that she would “personally walk the statements over to the division responsible for stopping unauthorized profiles and they would take care of it.”

Two months later the profiles were still on Yahoo’s site, and Ms. Barnes filed suit against Yahoo in Oregon state court. At that point, the profiles were at last removed.

To pin liability on Yahoo, Barnes need to get past 17 U.S.C. Section 230 and, like so many that came before her, she tried valiantly but unsuccessfully.

However, sometimes imaginative lawyering pays off, and Barnes argued breach of contract, based on the fact that Yahoo had engaged in discussions with her, promised to remove the material, and then failed to do so. The court:

Subsection 230(c)(1) creates a baseline rule: no liability for publishing or speaking the content of other information service providers. Insofar as Yahoo made a promise with the constructive intent that it be enforceable, it has implicitly agreed to an alteration in such baseline. Therefore, we conclude that, insofar as Barnes alleges a breach of contract claim under the theory of promissory estoppel, subsection 230(c)(1) of the Act does not preclude her cause of action.

The takeaway from this case? If you are an online service provider and someone asks you to remove objectionable material, you have two choices: you can refuse to do so and be pretty confident that Section 230 will provide you with immunity; or, if you say you will remove the material, do so, or risk facing the outcome that Yahoo experienced in this case.

Link to the case: Barnes v. Yahoo

What Happens When California and Massachusetts Law on the Enforceability of Non-Compete Agreements Clash in Massachusetts Superior Court? Read on ….

David Donatelli was an EMC Executive VP. He left EMC, and went to work for Hewlett Packard in California. EMC filed suit to enforce Donatelli’s one year non-compete agreement. Donatelli argued that the Massachusetts court should defer enforcement to California law, which is hostile to non-compete agreements.

Judge Stephen Neel, in Suffolk Superior Court in Boston, didn’t buy it. He held that California’s legislative policy against non-compete agreements does not trump Massachusetts common law, at least under the facts of this case.

Once he got past this major bump in the road, Judge Neel held that continued employment sufficed as consideration for a non-compete agreement (he also noted that the agreement recited that it had been signed “under seal,” magic words that favor enforceability in Massachusetts), held that the agreement was not overbroad, and issued the injunction.

Justice Neel did, however, hold a branch above the waters before Mr. Donatelli sank beneath the waves – he stated that Donatelli could move to modify the order if he could show that his job duties at at HP would not “overlap with products or services being developed, produced, marketed or sold by EMC.” However, since the entire purpose of Donatelli’s hire by HP (according to press at the time) was to head HP’s Enterprise Storage and Server Division, which would be competitive with EMC, it’s hard to see how Donatelli could both satisfy the judge and serve HP as intended.

If you’re wondering why legislation aimed at making non-compete agreements unenforceable in Massachusetts is unlikely to be passed, meditate on this case for a while.

Donatelli will almost certainly file a single-justice appeal – nothing to lose and a lot to gain.

Here is a link to the decision: EMC v. Donatelli.

Boston Bar Association CLE: Hot Issues in Internet Law, CDA Section 230

We had a great CLE at the BBA on Wednesday evening. The lucky folks who attended received three hours of (almost) nonstop legal info, and we barely scratched the surface of the topics.

I spoke on CDA Section 230, which has seen a great deal of activity lately, and there are no signs it’s slowing down. Below, via scribd.com, are the slides and paper that I prepared for the program.

CDA Section 230 Article, BBA April 2009