TIK TOK TIK TOK: Time Running Out For Preliminary Court Approval of Multimillion Dollar TikTok Privacy Settlement

On February 25, 2021, Plaintiffs’ Motion for preliminary approval of a $92 million settlement was filed in the ongoing multidistrict litigation, In Re: Tiktok, Inc., Consumer Privacy Litigation (Case: 1:20-cv-04699).  Shortly after the filing of the motion, objections were filed regarding the basis and terms of the settlement.  After a hearing on March 3, 2021, the Court requested a supplemental briefing from the parties explaining, amongst other concerns: how the parties arrived at the final $92 million figure; how they addressed differences between adult users and minor users for purposes of the settlement; and, an additional explanation as to why class members could not be notified of the deal through the TikTok app itself.

So, what’s the scoop?  Let’s backtrack first.

Recall that on August 8, 2020, the Panel on Multidistrict Litigation consolidated 10 pending class action cases against TikTok Inc.  Five cases in the Northern District of California, four in the Northern District of Illinois, and one in the Southern District of Illinois, as In Re: Tiktok, Inc., Consumer Privacy Litigation (Case: 1:20-cv-04699).  The multidistrict litigation has now expanded to 21 putative class actions against Defendants TikTok Inc., ByteDance Technology Inc., and foreign Defendants TikTok, Ltd. (previously known and sued as Musical.ly), and Beijing ByteDance Technology Co. Ltd.  All actions concern Defendants’ collection, use, and transmission of highly sensitive personal data via Defendants’ ubiquitous TikTok app.  Plaintiffs in the consolidated actions allege that Defendants’ conduct with, respect to the scanning, capture, retention, dissemination of the facial geometry and other biometric information of users of the app is in violation of multiple privacy statutes.  Plaintiffs also allege that Defendants use private information to track and profile TikTok users among other things, for ad targeting and profit.  In other words: this case is obviously a big deal in the world of data privacy litigation.

The operative Consolidated Amended Class Action Complaint, filed on December 18, 2020, alleges ten separate causes of action against Defendants, including, violation of the Illinois Biometric Information Privacy Act (“BIPA”), the Computer Fraud and Abuse Act (“CFAA”), the California Comprehensive Data Access and Fraud Act (“CDAFA”), the right to privacy under the California Constitution, and California Unfair Competition Law (“UCL”), among others.

In response, TikTok has argued that it does not and never has collected from its users any biometric identifiers or derivative information protected by law, nor has it ever shared U.S. user data with foreign government third-parties.  In support of its position that it has not violated BIPA, TikTok has asserted that its user video data is not used to identify anyone, as app users cannot tag or label faces in videos with a user’s real name or identity.

The objections that were recently filed include that the settlement does not account for serious conflicts between minor class members, nationwide class members, and Illinois subclass members, arising out of: (a) the minors’ abilities to disaffirm any arbitration agreement or class action waiver, and (b) TikTok’s statutory obligation to delete data collected about them. The objections also include that the proposed settlement value is unfair, unreasonable, inadequate, and is far below the net expected value of continued litigation.  Objectors also attack the notice plan as violating both Rule 23 and Due Process. Objecting Plaintiffs allege that the notice plan improperly relies on publication notice when direct notice should be via the TikTok app itself.  They also claim the notice plan fails to set forth the estimated claim value, and appears to be designed to suppress the claims and objections rates.

How will this all shake out?  Will the court ultimately be satisfied that the settlement is fair and otherwise meets the various requirements necessary for preliminary approval?  Supplemental briefs from the parties are due by March 23, and a status and motion hearing is set for April 6.

© Copyright 2020 Squire Patton Boggs (US) LLP


For more articles on Tik Tok, visit the NLR Litigation / Trial Practice section.

Employee Wins Federal Appeal Involving Commonly-used Defenses in Employment Discrimination Cases

The U.S. Court of Appeals for the Fourth Circuit issued a decision (Haynes v. Waste Connections, Inc.) this week that reversed in the employee’s favor.  The opinion tackles many commonly-used defenses by employers in employment discrimination and retaliation cases.  In particular, the Fourth Circuit analyzed whether:

  • the employee had identified a valid comparator (aka a similarly situated employee);
  • established that he was performing his job satisfactorily when the employer fired him; and
  • produced any evidence of pretext, which looks to whether the employee can show that the employer’s stated reason for the adverse employment action (termination, demotion, etc.) was meant to disguise a discriminatory intent.

Ultimately, the court found in favor of the employee and sent the case back down to the trial court.

Background

Jimmy Haynes, who is African-American, claimed that his former employer, Waste Connections, Inc. (WCI), discriminated and retaliated against him when it fired him.  Haynes alleged that WCI violated Title VII of the 1964 Civil Rights Act and 42 U.S.C. §1981 (Section 1981) as a result.  Notably, while Title VII and Section 1981 have many similarities in terms of prohibiting race discrimination in employment, a number of significant differences exist that can impact how a court reviews these claims, as discussed here.

The key facts had to do with Haynes reporting to work one evening and then leaving the job site.  According to Haynes, he left work due to a stomach virus and told his supervisor about this.  WCI, on the other hand, claimed that Haynes walked off the job because he was frustrated that his normal truck was not ready.  Two days later, WCI fired Haynes for job abandonment.  WCI did not mention any other reason for terminating Haynes’ employment at the time.  During the course of his lawsuit though, WCI claimed that Haynes had also committed other violations during June and August 2015.

After Haynes filed his lawsuit in court and the parties exchanged information during the discovery process, WCI filed a motion for summary judgment arguing that no disputed material facts existed and thus a jury trial was unnecessary.  The trial court granted summary judgment to the WCI and dismissed Haynes’ lawsuit.  Haynes then appealed this decision and the appellate court reversed the trial court’s decision.

The Fourth Circuit’s findings

Valid comparator/similarly situated employee

The Fourth Circuit first analyzed whether Haynes had established a proper comparator who was not African-American and was treated better than him.  Noting that comparing similar employees will never involve exactly the same offenses occurring over the same time period with the same set of facts, the court explained that showing someone is a valid comparator involves:

  • evidence that the employee and the comparator dealt with the same supervisor;
  • were subject to the same standards; and
  • engaged in the same conduct without such differentiating circumstances that would distinguish their conduct or the employer’s treatment of them

Haynes v. Waste Connections, Inc., Case No. 17-2431 at p. 8, (4th Cir. April 23, 2019).  The appellate court found that a white employee, who had the same supervisor as Haynes, had several workplace violations.  These violations included twice using a cellphone while driving, driving while distracted, and responding to a traffic situation late.  Id.  It also appeared that this white employee had yelled at the supervisor before quitting his job.  Yet the white employee was allowed to return to work and Haynes, who had not yelled at his supervisor and had fewer infractions, was fired.

Because both employees had the same supervisor, were subject to the same standards, and engaged in similar conduct, the court found the white employee to be a valid comparator.  In making this decision, the appellate court rejected WCI’s argument that the white employee’s infractions did not cause any damages whereas Haynes’ violations did.  It also turned away WCI’s claim that the white employee had notified the employer that he was resigning while Haynes simply walked off the job.

Was Haynes performing his job satisfactorily

WCI also argued that Haynes had not demonstrated that he was performing his job satisfactorily at the time WCI fired him.  The Fourth Circuit pointed out that Haynes was not required “to show that he was a perfect or model employee;” rather, he need only show that he was qualified for the position and meeting WCI’s legitimate expectations.  To support his contention that he was satisfactorily performing his job, Haynes produced evidence that:

  • his supervisor told him the month before Haynes was terminated that “everything looks good” and “nothing to worry about” in terms of his upcoming job performance evaluation; and
  • Haynes received bonuses during the relevant time period

The court thus ruled that Haynes had presented enough evidence to demonstrate satisfactory job performance.

Evidence of pretext

To show pretext, “a plaintiff may show that an employer’s proffered non-discriminatory reasons for the termination are inconsistent over time, false, or based on mistakes of fact.”  Haynes, Case No. 17-2431 at 12.  If the employee does so, then summary judgment should be denied and the case should proceed to trial.

The most important factor to the Fourth Circuit was that WCI came up with a new reason why it claims it terminated Haynes’ employment:  his poor attitude.  The only reason given at the time of Haynes’ termination, however, was job abandonment.  Further, the company policy on job abandonment defines it as three days with no call or no show, yet Haynes had called and texted within one day.  Ultimately, the Fourth Circuit found too many inconsistencies with WCI’s purported reasons for firing Haynes and thus ordered that a jury should decide whose version is correct.

Key takeaways

Some important factors can be gleaned from the Fourth Circuit’s decision here:

  • For the comparator/similarly situated analysis, you’re more likely to meet this test if you and the other employee(s) you’re comparing yourself to:
    • share the same supervisor;
    • perform very similar job tasks and responsibilities (both the number and weight) as the other person;
    • if the case involves discipline, then the number and severity of the infractions should be relatively similar;
    • have similar job performance evaluations and disciplinary history; and
    • your experience level (including supervisory experience) the same as the other person
  • To demonstrate that you were performing your job satisfactorily, evidence that you received bonuses, awards, and/or average (or higher) job performance ratings will be important;
  • Regarding pretext, the more inconsistencies you can show the employer’s reasons for firing you, the better off you will be.

© 2019 Zuckerman Law
This post was written by Eric Bachman of Zuckerman Law.

Mississippi Gaming Commission’s Special Interim Commission Meeting: September 14, 2017

The Mississippi Gaming Commission held a Special Interim Meeting on Thursday, September 14, 2017, at 10:00 a.m. in the Biloxi office of the Mississippi Gaming Commission. Executive Director Allen Godfrey, Chairman Al Hopkins, and Commissioner Jerry Griffith were in attendance. The following matters were considered:

Riverboat Corporation of Mississippi d/b/a Golden Nugget Biloxi Hotel and Casino received approval of the following:

  1. Registration of Golden Nugget, Inc. as a Holding Company of Riverboat Corporation of Mississippi

  2. Registration of Landry’s Gaming, Inc. as a Holding Company of Riverboat Corporation of Mississippi

  3. Transfer of the Equity Interests or Securities of Riverboat Corporation of Mississippi

  4. Pledges of Equity Interests or Securities in Connection with the Credit Facility

  5. Imposition of Equity Restrictions Including Negative Equity Pledges in Connection with the Credit Facility

These approvals were in connection with a restructuring of the ownership of the Golden Nugget companies in order to facilitate the acquisition of the Houston Rockets NBA basketball team.

This post was written by Thomas B. Shepherd & Christopher S. Pace  of Jones Walker LLP © 2017
For more legal analysis go to The National Law Review

Timeliness – The Devil Is in the Details (a.k.a. Rules)

Mcdermott Will Emery Law Firm

GEA Process Engineering, Inc. v. Steuben Foods, Inc.

In an order issued by the Patent Trial and Appeal Board (PTAB or Board), the Board expunged exhibits from the records of five related cases on the basis of timeliness. GEA Process Engineering, Inc. v. Steuben Foods, Inc., Case Nos. IPR2014-00041, IPR2014-00043, IPR2014-00051, IPR2014-00054, IPR2014-00055 (PTAB, Sept. 29, 2014) (Elluru, APJ).

In post-grant proceedings, it is important to note that there are two different deadlines for objecting to evidence.  Prior to institution, a patent owner is required to object to evidence submitted to the PTAB with the petition within 10 business days of institution of a trial. Once the trial has begun, i.e., after institution, a party seeking to object to the introduction of evidence or an exhibit must raise its objection within five business days of service of the evidence or exhibit. The objections should be served on the offering party and not filed with the PTAB.

In GEA Process Engineering v. Steuben Foods, following the institution of trial, the petitioner filed what it characterized as exhibits entitled “Petitioner’s Objections” to the patent owner’s evidence. However, the PTAB expunged the exhibits from the records of all five cases. As the Board explained, the applicable rule, 37 C.F.R. § 42.64(b)(1), requires that “[o]nce a trial has been instituted, any objection [to evidence] must be served within five business days of service of evidence to which the objection is directed.” As such, the petitioner’s filingits objections to the patent owner’s evidence, at the Board was improper—a potentially costly mistake.

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Rolex Says "Time is Up" for Alleged Craigslist Counterfeiter

Womble Carlyle

 

On February 5, 2014, Rolex Watch U.S.A.,Inc. (“Rolex”) of New York, New York, filed a complaint against Nicholas Peter Karettis (“the defendant”) of Tyrone, Georgia, allegingTrademark Counterfeiting and Infringement under 15 U.S.C. § 1114.

The complaint alleges Mr. Karettis sold, offered for sale, distributed, promoted, and advertised merchandise that was counterfeit and infringing upon Rolex’s federally registered trademarks.

Rolex owns numerous trademarks and trade names including at least the following:

CROWN DEVICE (design) Registration no. 657,756 Registered on 1/28/1958 for timepieces of all kinds and parts thereof.

DATEJUST Registration no. 674,177 Registered on 2/17/1959 for timepieces and parts thereof.

DAY-DATE Registration no. 831,652 Registered on 7/4/1967 for wrist watches.

DAYTONA Registration no. 2,331,145 Registered on 3/21/2000 for watches.

EXPLORER Registration no. 2,518,894 Registered on 12/18/2001 for watches.

EXPLORER II Registration no. 2,445,357 Registered on 4/24/2001 for watches.

GMT-MASTER Registration no. 683,249 Registered on 8/11/1959 for watches.

GMT-MASTER II Registration no. 2,985,308 Registered on 8/16/2005 for watches and parts thereof.

OYSTER Registration no. 239,383 Registered on 3/6/28 for watches, movements, cases, dials, and other parts of watches.

OYSTER PERPETUAL Registration no. 1,105,602 Registered on 11/7/1978 for watches and parts thereof.

PRESIDENT Registration no. 520,309 Registered on 1/24/1950 for wristbands and bracelets for watches made wholly or in part or plated with precious metals, sold separately from watches.

ROLEX Registration no. 101,819 Registered on 1/12/1915 for watches, clocks, parts of watches and clocks, and their cases.

ROLEX DAYTONA Registration no. 1,960,768 Registered on 3/5/1996 for watches.

ROLEX DEEP SEA Registration no. 3,703,603 Registered on 10/27/2009 for watches.

SEA-DWELLER Registration no. 860,527 Registered on 11/19/1968 for watches, clocks and parts thereof.

SUBMARINER Registration no. 1,782,604 Registered on 7/20/1993 for watches.

TURN-O-GRAPH Registration no. 2,950,028 Registered on 5/10/2005 for watches and parts thereof.

YACHTMASTER Registration no. 1,749,374 Registered on 1/26/1993 for watches.

Rolex Trademark Infringement
The Rolex Crown Device design

According to the complaint, Rolex discovered a classified advertisement appearing on the website “www.craigslist.org” (“Craigslist”) advertising for sale watches bearing counterfeits and infringements of the Rolex Registered Trademarks. These watches were allegedly advertised as “AAA Quality Replica” watches and listed for sale at a price of $200. 

Also according to the complaint, Rolex forwarded the Craigslist add to its private investigator who then called the number provided on the advertisement and arranged a meeting with a man identifying himself as “Nick.”  Rolex’s investigator also arranged for members of the Douglas County Sheriff’s Department to be present at this meeting.  At the meeting, members of the Douglas County Sheriff’s Department arrested the defendant and seized five (5) watches identified by Rolex’s investigator as bearing counterfeits and infringements of the Rolex Registered Trademarks.

Thereafter, the defendant was charged with forged or counterfeited trademarks, service marks, or copyrighted or registered designs, constituting unauthorized reproductions as defined in O.C.G.A. § 10-1-454. Defendant’s vehicle was impounded and the Douglas County Sheriff’s Department seized $14,800.00 in cash found on the defendant’s person at the time of his arrest.

The complaint further alleges irreparable harm, unjust enrichment, willful and malicious infringement, and that the case is exceptional under 15 U.S.C. § 1117(a) because of the defendant’s alleged reckless disregard or willful blindness in connection with unlawful activities.

Rolex seeks an injunction and treble damages or statutory damages under 15 U.S.C. § 1117(c).  Rolex also seeks legal and investigative fees along with any further relief as the court deems just and proper.

The case is Rolex Watch U.S.A., Inc. v. Karettis No. 3:14-cv-12-TCB filed in United States District Court for the Northern District of Georgia, Newnan Division on February 5, 2014, and is assigned to Judge Timothy C. Batten.

 
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Locked Out of LinkedIn: A Federal Court Opens the Door To Employer Liability

Recently an article by Jessica A. Burt of Drinker Biddle & Reath LLP regarding LinkedIn was featured in The National Law Review:

DrinkerBiddle

 

The U.S. District Court for the Eastern District of Pennsylvania determined this week inEagle v. Morgan, et al., that a terminated employee who was locked out of her LinkedIn account by her employer suffered no legal damages despite successfully proving claims for unauthorized use of her name, invasion of privacy by misappropriation of identity, and misappropriation of publicity.  The district court previously dismissed Dr. Eagle’s federal claims under the Computer Fraud and Abuse Act and the Lanham Act, and retained jurisdiction over the remaining state law claims.

Dr. Linda Eagle, a former founder and executive of Edcomm, Inc., a banking education company that provides services to the banking community, created her LinkedIn account using her Edcomm e-mail address.  Edcomm did not require its employees to create LinkedIn accounts, nor did it pay for accounts if employees created them.  At the time of Eagle’s termination, Edcomm had no policy in place informing its employees that LinkedIn accounts were the property of the employer.  Eagle shared her LinkedIn password with several Edcomm employees to update her account and respond to invitations.  Following her termination, Edcomm employees accessed Eagle’s LinkedIn account, changed her password, and updated the account with her successor, Sandi Morgan’s picture and personal information.  However, Edcomm failed to change the homepage’s URL to remove Eagle’s name and likewise failed to remove Eagle’s honors and awards section.  Edcomm had full control of the account for approximately 16 days.  LinkedIn subsequently took over the account, and Eagle regained access approximately one month after Edcomm changed her password.  Eagle filed suit against Edcomm and several employees shortly thereafter alleging illegal use of her LinkedIn account.

With respect to Eagle’s claim for unauthorized use of her name, the Court stated that when Edcomm had control of Eagle’s account, an individual conducting a search on Google or LinkedIn for Dr. Eagle would be directed to a URL for a LinkedIn web page showing Sandi Morgan’s name, profile, and employment with Edcomm.  Specifically, the Court noted that when an individual searched for Eagle, he or she would unknowingly be put in contact with Edcomm despite the fact that Eagle didn’t work there anymore.  The name “Dr. Linda Eagle” had commercial value due to Eagle’s efforts to develop her reputation, and Edcomm therefore received the commercial benefit of using her name to promote the service of its business.

The Court similarly found that Eagle successfully proved her claim against Edcomm for invasion of privacy by misappropriation of identity because Edcomm maintained the LinkedIn homepage under a URL that contained Eagle’s name.  Despite the fact that Edcomm updated the LinkedIn homepage with Sandi Morgan’s profile information, the URL still contained Eagle’s name and the Court held that her name had the benefit of her reputation and commercial value.

Additionally, the Court entered judgment in Eagle’s favor on her claim for misappropriation of publicity because she maintained an exclusive right to control the commercial value of her name and to prevent others from exploiting it without permission.  The Court held that Edcomm deprived Eagle of the commercial benefit of her name when it entered her LinkedIn account, changed her password to prevent her from accessing it, and altered the account to display Sandi Morgan’s information.  The Court noted that Edcomm took these actions instead of creating a new account for Sandi Morgan.

Despite her success on three causes of action, the Court determined that Eagle was not entitled to any compensatory or punitive damages.  The Court was not persuaded that Eagle established with reasonable certainty she had lost any sales, contracts, deals, or clients during the period she could not access her LinkedIn account.  Eagle offered the testimony of Clifford Brody, the co-founder of Edcomm, to provide an analysis of her damages.  His calculation was based on Eagle’s average sales per year divided by the number of contacts she maintained on LinkedIn to arrive at a dollar figure per contact, per year.  The Court referred to this method as “creative guesswork” and highlighted the fact that there is a chance that even with full access to her LinkedIn account, she would not have made any deals or signed any contracts with her LinkedIn contacts.  In denying her claim for punitive damages, the Court stated that Eagle failed to call a single witness to offer evidence regarding Defendants’ state of mind or the circumstances surrounding these events.

The Court entered judgment in favor of Defendant Edcomm, Inc. with respect to Eagle’s claims for identity theft, conversion, tortious interference with her LinkedIn contract, civil conspiracy, and civil aiding and abetting.  Judgment was entered in favor of the individual defendants with respect to all of Eagle’s claims, including the claims mentioned above that she successfully proved against Edcomm.  In October 2012, the District Court dismissed Eagle’s federal claims under the Computer Fraud and Abuse Act and Lanham Act as to all defendants.

This case presents another stepping stone in the continuously changing world of social media law.  While employers do have legitimate  concerns about LinkedIn accounts with information that identifies clients’ key decision makers and a company’s strategic business relationships, preventing former employees from accessing their accounts without their consent exposes employers to damages if a former employee can proffer evidence of a lost or misdirected sale or deal. However, there is nothing in the Eagle v. Morgan opinion that restricts an employer’s ability to have employees remove customer names from their LinkedIn accounts before departing from the company.  In fact, courts have recognized that employers do have protectable rights in this information.  For example, in TEKsystems Inc. v. Hammernick, et al., the plaintiff alleged that its former employee’s use of LinkedIn to connect with former colleagues and clients violated the parties’ noncompete/nonsolicitation agreement. In that case, the Court entered a Consent Order for Permanent Injunction prohibiting the former employee from soliciting or contacting the company’s customers for a period of 12 months.  Also, in Coface Collections North America, Inc. v. Newton, the Third Circuit affirmed the district court’s entry of a preliminary injunction against the company’s former owner who, among other things, used LinkedIn to compete with his former company in violation of a restrictive covenant.   

©2013 Drinker Biddle & Reath LLP