Author: National Law Forum

A group of in-house attorneys developed the National Law Review on-line edition to create an easy to use resource to capture legal trends and news as they first start to emerge. We were looking for a better way to organize, vet and easily retrieve all the updates that were being sent to us on a daily basis.In the process, we’ve become one of the highest volume business law websites in the U.S. Today, the National Law Review’s seasoned editors screen and classify breaking news and analysis authored by recognized legal professionals and our own journalists. There is no log in to access the database and new articles are added hourly. The National Law Review revolutionized legal publication in 1888 and this cutting-edge tradition continues today.

Patents for Financial Services Summit

The National Law Review is pleased to bring you information about the upcoming Patents for Financial Services Summit:

The protection of patents and IP is critical to the financial services industry due to the increasingly competitive marketplace and the growth of patent trolls. You must ensure protection of your own innovation to remain competitive and take great care to avoid infringing on the patents of others. World Research Group’s 9th Annual Patents for Financial Services Summit, which is being held on July 25-26, 2012 in NYC is intended for in-house legal executives to engage in networking opportunities, shared best practices, hear cutting-edge case studies, and discuss new rules and regulations impacting financial services patent policies. This two-day Summit will consist of informative educational sessions and interactive panel discussions led by senior-level patent counsels and experts on patent trends and strategies.

Join our Patents for the Financial Services Summit and benefit from in-depth discussions on ways to grow patent strategies, practical case-studies and interactive panel discussions, featuring experienced and highly knowledgeable IP counsels, regulators, law firms and technology experts.

The 9th Annual Patents for Financial Services Summit addresses key issues and uncovers the latest developments including, but not limited to the following topics:

  • The America Invents Act and its impact on patent procedures and litigation
  • Implementing a successful monetization program to determine the most valuable and effective use of IP
  • Learning the newest updates from recent Supreme Court cases
  • Legal update on the US Patent Office Examination of financial services inventions post-Bilski
  • Aligning your IP department and outside counsel with corporate business objectives to impact the bottom line
  • Effectively managing your legal department activities and budget
  • Ensuring you consistently allocate resources to the right risks or opportunities, including identifying the cases to try and the cases to settle
  • Communicating with outside counsel to ensure an updated knowledge of the ever-changing legal landscape
  • Altering patent protection strategies to account for recent court decisions
  • Social media update on managing control over protected IP
  • Avoiding and managing patent litigation
  • Defending against patent trolls
  • Incentivizing employees and finding new ways to encourage creativity

Supreme Court of Texas to Federal Circuit: Don’t Mess with Texas but Feel Free to Mess with Texas Patent Attorneys; SCOTUS May Weigh In on “Arising-Under” Jurisdiction

Recently an article about Texas Patent Attorneys by Adam Auchter Allgood and Paul Devinsky of McDermott Will & Emery appeared in The National Law Review:

In a 5-3 decision, the Supreme Court of Texas, while specifically stating that it is not bound by the holdings of the U. S. Court of Appeals for the Federal Circuit, has relied on the Federal Circuit opinions in Immunocept (IP Update, Vol. 10, No. 10)and Air Measurement (IP Update, Vol. 14, No. 8) in determining that the federal courts possesses exclusive jurisdiction for state malpractice claims “arising-under” underlying patent matters. Minton v. Gunn, 355 S.W.3d 634, 653 (Supr. Ct. Tex., Dec. 16, 2011) (Green, J.) (Guzman, J., dissenting, joined by Medina, J. and Willett, J.). This decision is now at the U.S. Supreme Court as the subject of a petition for cert.

Minton is only one of a series of cases to explore the “arising under” jurisdiction of the Federal Circuit. The statute 28 U.S.C. §1338, which provides the federal courts with exclusive jurisdiction for any civil action “arising under” federal law relating to patents, has come under extensive scrutiny lately by the Federal Circuit. In several cases in which attorney malpractice was alleged in connection with patent procurement or enforcement, Circuit Judge O’Malley has taken the opportunity to present her views on the limits of the jurisdiction of the Federal Circuit to hear such disputes which are grounded in state law. For example, Judge O’Malley has dissented from the dismissal of a petition seeking an en banc review of the 2010 precedential Federal Circuit opinion in Davis v. Brouse McDowell, L.P.A. (see IP Update, Vol. 13, No. 3), which found federal jurisdiction over a legal malpractice action involving missed deadlines in which no patent actually issued. Recent cases in which Judge O’Malley has aired her view on this jurisdictional issue include the following:

  • Memorylink Corp. v. Motorola, Inc., Case No. 10-1533 (Fed. Cir., April 11, 2012) (per curiam order) (O’Malley, J., dissenting from the denial of the petition for rehearing en banc)
  • Minkin v. Gibbons, P.C., Case No. 11-1178 (Fed. Cir., May 4, 2012) (Reyna, J. (O’Malley, J., concurring in the result and conceding that under controlling Federal Circuit case law, the Federal Circuit is compelled to hear the case; but explaining why, in her view, it is not “proper” to do so)
  • Landmark Screens, LLC v. Morgan, Lewis, & Bockius, LLP, Case No. 11-1297 (Fed. Cir., April 23, 2012) (Clevenger, J.) (O’Malley, J., concurring and urging en banc consideration of the jurisdictional issue)
  • Byrne v. Wood, Herron & Evans, LLP, Case No. 11-1012 (Fed. Cir. March 22, 2012) (per curiam) (O’Malley, J., concurring in the Court’s opinion on the malpractice claim that address the issue on appeal, while noting that controlling Federal Circuit authority “compels us to do so”; but also pointing out the “federalism considerations” that mitigate against doing so)
  • USSPS, Ltd. v. Avery Dennison Corp., Case No. 11-1525 (Fed. Cir., April 17, 2012) (per curiam) (O’Malley, J., joined by Mayer, J., concurring while voicing what she regards as “significant” federalism concerns that are raised by the Federal Circuit’s exercise of jurisdiction over “these purely state laws claims”)

While Judge O’Malley, a former federal district judge who presided over more than 100 patent and trademark cases, continues to follow the binding Federal CircuitDavis precedent, it is clear that she feels that it is an incorrect application of Supreme Court case law. Both state and federal courts are applying the four-part standard enumerated by the Supreme Court in 2005 in Grable, 545 U.S. 308, for the general “arising-under” jurisdiction of §1331 to the specific patent section of §1338. In Judge O’Malley’s view federal question jurisdiction, as discussed in Grable, exists if resolving a federal issue is necessary to resolution of the state-law claim; the federal issue is actually disputed; the federal issue is substantial; and federal jurisdiction will not disturb the balance of federal and state judicial responsibilities.

Malpractice cases involving patents usually are one of two varieties involving either patent prosecution errors or non-asserted defenses during infringement litigation. Judge O’Malley tends to disagree with the application of the third Grable factor since most of the issues underlying malpractice claims are case-specific, factual inquiries and require only application, not interpretation of federal patent law and would have little or no bearing on other cases. As to the fourth factor, Judge O’Malley asserts that malpractice cases do not implicate any underlying patent rights themselves. Any patent issue that is decided will only inform the state law standards of causation or damages and would not have binding effect on other patent cases.

The majority in Minton (as well as controlling Federal Circuit case law) however, rely on the argument that a “case within a case” exists in malpractice claims, since patent issues must be analyzed in order for the plaintiff to prove a proximate causal connection that the harm or loss would not have occurred without the attorney’s malpractice. The Minton Court (like Federal Circuit precedent) is based on the rational that litigants benefit from judges who are familiar and experienced with complicated patent rules and that there is a strong federal interest in the uniform application of patent laws.

Practice Note: With the Texas Supreme Court decision in Minton currently teed up before the U.S. Supreme Court, Judge O’Malley may find her desired Federal Circuiten banc review bypassed as the issue may receive direct consideration by the Supreme Court. Certiorari briefs are currently being filed with the Supreme Court (Docket No. 11-1118). On April 26, Memorylink also filed a petition for cert to the Supreme Court drawing on Judge O’Malley’s dissent in Memorylink v. Motorola, arguing that by asserting jurisdiction on state law malpractice claims, the Federal Circuit is disturbing the appropriate balance between state and federal courts.

© 2012 McDermott Will & Emery

ICC – Economic Sanctions in the Global Economy

The National Law Review is pleased to bring you information regarding the upcoming ICC Institute’s Economic Sanctions in the Global Economy Conference:

At a time when the global financial crisis has severely impacted trade flows and hampered world growth, what is the effect and the justification for the extraterritorial application of economic sanctions?

The long arm reach of law enforcement agencies sets global companies unprecedented challenges in terms of conflict of laws and regulatory jurisdiction. Dozens of criminal, administrative or regulatory investigations on both sides of the Atlantic are currently targeting billions of dollars worth of commercial transactions and cross-border payments. Penalties in the hundred of millions of dollars are regularly disclosed sanctioning global companies and banks for their past cross-border dealings . What is the right balance between the governments’ objective of moving to a safer world and the business reality? How are judges and arbitrators expected to adjudicate a claim for non-performance triggered by foreign economic sanctions?

Conference highlights
This event is unprecedented in bringing together senior government officials from both sides of the Atlantic and decision makers in global companies as well as their counsel. Speakers and participants have a unique opportunity to discuss in an open public-private forum the regulators’ approach towards economic sanctions and the expectation of industry leaders as to how sanctions could be better conceived and applied.

Who should attend?

Lawyers, compliance officers, bank executives, general managers, payment and treasury officers in companies and banks, government officials and academics.

Has Someone Applied to Register Your .BRAND? Top Five Things You Need to Know

The National Law Review recently published an article by Geri L. Haight of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. regarding The Registration of Brands:

You’ve heard about the planned expansion of the domain name system, but what does it really mean for trademark owners?

Last year, the Internet Committee for Assigned Names and Numbers (ICANN), the organization responsible for the coordination of the global Internet domain name system, announced a plan to bring sweeping changes to the Internet’s generic top level domain (gTLD) structure. Internet users are familiar with gTLDs, if not by name. gTLDs are Internet extensions such as .com, .org and .net found at the end of a domain name. Under the new system, a business could apply to own its .BRAND. An automobile company could apply to own .CARS. A city government could apply to own .CITY. The possibilities, seemingly, are endless.

ICANN received 1900 applications for new gTLDs during the first application period, which is now closed. Google announced last week that it had applied for the gTLDs .GOOGLE, .YOUTUBE and .LOL among others. Canon Inc. announced that it has applied for the gTLD .CANON in order to “increase the convenience and effectiveness of its online communications.” The domain name registry Donuts Inc. announced that it has applied for 307 new gTLDs. The timeframe and process for reviewing the applications are somewhat fluid but the first new batch of gTLDs is slated to become active in early 2013. The remaining batch of applied-for gTLDs will not go live until 2014 or later. So what should trademark owners do now to prepare for the new regime?

1. Review and Analyze the List of Applied-For gTLDs

In what ICANN calls “Reveal Day,” on Wednesday, June 13, 2012, ICANN will publicly post a listing of all applied-for gTLD character strings. This will be the first public glimpse into which entities have applied to own which new gTLDs. Although some companies have announced publicly that they have submitted applications to participate in the new gTLD program, most have remained silent throughout the initial application phase. But all will be revealed on Reveal Day. Trademark owners should carefully review the list of applied-for gTLDs in order to determine if any conflict with pre-existing trademark rights. But remember, the list of applied-for gTLDs have not been approved by ICANN yet. There is time to take action if necessary to protect your trademark rights.

2. Submit a Comment to ICANN

What can you do if you learn on Reveal Day that someone has applied to register your .BRAND? Following publication on Reveal Day, interested parties may submit comments related to proposed new gTLDs to ICANN for consideration by the independent evaluators assessing each application. During the comment period, trademark owners can submit comments regarding potential trademark infringement, dilution, and related concerns raised by particular applications for gTLDs. Application comments received within 60 days of Reveal Day, i.e., by August 12th, will be available to the evaluation panel performing the initial evaluation reviews of all pending applications. Initial evaluation of the applications is expected to begin in early July.

3. Use Dispute Resolution Procedures to Object to Infringing gTLDs and/or Domain Names

Separate from the comment procedure, and prior to the approval of an applied-for gTLD, a formal objection process will be available to trademark owners. ICANN has appointed the World Intellectual Property Organization (WIPO) to be the exclusive provider of dispute resolution services when a third party files a formal “Legal Rights Objection” (LRO) to a pending application. A Legal Rights Objection can be filed where the applied-for gTLD (i) takes unfair advantage of the unique character or the reputation of the objector’s registered or unregistered trademark, intergovernmental organization (IGO) name or acronym, or (ii) without justification, the gTLD impairs the distinctive character or the reputation of the objector’s mark, IGO name or acronym, or (iii) creates an impermissible likelihood of confusion between the applied-for gTLD and the objector’s mark, IGO name or acronym. The LRO process offers a good option for trademark owners who believe that their trademark rights may be encroached upon by a particular applied-for gTLD. But the process comes with a price tag of $10,000 fee for arbitration of a LRO by a single-member panel. The applicant of the challenged gTLD similarly is required to pay a $10,000 fee. If the applicant fails to do so, the objection will be deemed successful. The sole remedies available for a LRO are the success or dismissal of the objection. Monetary damages are not available through this process.

Many anticipate that the problem of “cybersquatting” will dramatically increase with the expansion of the gTLD system. Cybersquatting refers to the bad faith registration of a domain name that contains another’s brand or trademark. If an applied-for gTLD is approved by ICANN and domain names registered using the new gTLD infringe upon your trademark rights, the Uniform Domain Name Dispute Resolution Policy (UDRP) remains available to resolve domain name disputes. Under the UDRP, domain name disputes are typically resolved in approximately 45-60 days and the associated filing fees are relatively low (approximately $1500 to resolve a dispute involving up to 5 domain names). WIPO has stated that the UDRP is “the only proven mechanism in place to absorb the impact of gTLD expansion.”

Another alternative currently contemplated by ICANN is the Uniform Rapid Suspension System (URS). The URS is intended to be a faster, more cost-efficient complement to the UDRP. It is intended for cases of trademark abuse. Unlike the UDRP, which allows a trademark owner to obtain the transfer of a domain name that impairs its trademark rights, the sole remedy available under the URS is the temporary suspension of a domain name for the duration of the registration period (which may be extended for one year). While the URS substantive criteria mirror that of the UDRP, there is a higher burden of proof for complainants. ICANN has not yet selected a vendor for the URS System.

4. Register Your Trademark With ICANN’s Trademark Clearinghouse

In connection with the launch of new gTLDs, ICANN plans to form a Trademark Clearinghouse. The Trademark Clearinghouse is intended to serve as a single database of authenticated, registered trademarks and will eliminate the need for trademark holders to register their marks in many different databases as new gTLDs are introduced. ICANN will require every new gTLD operator to utilize the Clearinghouse, which will be available globally and have the capabilities for validating trademark data from multiple global regions. As a result of these functions, the Trademark Clearinghouse is expected to play an important role in ensuring ongoing protection of trademark rights under the new scheme. If you are a trademark owner and have not applied to register a gTLD, registering your trademark with the Trademark Clearinghouse is an important step in protecting your trademark rights in the new gTLD world. The fee for initial trademark authentication and validation services is expected to be less than $150 US per submission/trademark.

Trademark owners who lodge their marks with the Clearinghouse will obtain certain advantages and notifications during “sunrise” periods that will apply to registrations of second-level (to the left of the “dot,” such as “secondlevel” in secondlevel.BRAND) domain names within newly launched gTLDs. In addition, registrants of second-level domain names will receive (at least for some period of time) notifications of trademarks that are an identical match to their newly registered domain names. Second-level domain name registrants, though, are not prevented from registering the sought-after domain name based on registration of a trademark with the Clearinghouse. They are simply put on notice that the domain name may conflict with another’s trademark rights. Importantly, notice to domain name registrants will not be provided except where the match with a trademark is identical. So, if the second-level domain name contains a misspelling of a trademark, no notification will be given to the registrant.

5. Apply to Register Your Trademarks and Service Marks

Having federally-registered trademark rights will offer valuable protection as the new domain name system becomes a reality. To the extent that you are using or plan to use a trademark or service mark in connection with the offering of goods or services and have not yet applied for federal trademark protection, you should consider doing so now. A federal trademark registration provides many valuable benefits. To start, it provides the owner with rights on a national (as opposed to a regional) level. A federal registration also provides you with the exclusive right to use the mark on or in connection with the goods or services listed in your registration. In connection with the new gTLD system, a federal trademark registration will help to strengthen and reinforce your trademark rights. It will also establish ownership of a particular trademark and, therefore, standing, to submit a legal right objection or other challenge to an applied-for gTLD or second-level domain name.

©1994-2012 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Webinar on Key Performance Indicators: Knowing the Numbers That Run Your Law Firm Now Available On-Demand

The National Law Review is pleased to bring you information about the upcoming Webinar on Key Performance Indicators (KPI) sponsored by The Rainmaker Institute:

Our law firm marketing webinars are great for attorneys who want to learn about proven legal marketing strategies in one-hour doses. But sometimes the timing just isn’t right. Which is why we are now providing one of our most popular webinars – Knowing the Numbers That Run Your Law Firm – in an on-demand format, so you can watch and learn at your convenience, as many times as you wish.

Over the last decade we have helped over 8,000 attorneys market and grow their business. During this time we have identified many of the key characteristics of highly successful law firms.

One of the more consistent ones is that they track specific numbers and key indicators that give them instant insight into how their law firm is performing on a weekly and monthly basis.

Key Performance Indicators (KPIs) are the numbers that make your law firm run. By analyzing these critical metrics, partners and owners of law firms can easily determine whether they are on track to achieve their goals or if they need to retool and refocus their marketing and business development efforts.

In this fast paced webinar, you learn:

  • How to easily identify the 12 key metrics your law firm needs to track and measure
  • How to set up a system to identify these numbers
  • The 7 critical systems every law firm must have
  • CPL and CPC: the 2 most important numbers every attorney must know in order to succeed
  • How to avoid “paralysis by analysis” and being overwhelmed by too much data
  • Delegating roles and responsibility to your staff
  • Using software to track your KPIs

If you’re a spreadsheet and data driven individual then you will love this webinar! However, if numbers scare you or you tend to ignore them because you have a hard time making heads or tails of all the different data you see, then this webinar is a “can’t miss” event!

We cut through the clutter and give you clear and easy to understand guidance on which numbers really matter the most, how to track this information, and what to do with it once you have it!

To register online for this on-demand webinar, click on this link: Knowing the Numbers That Run Your Law Firm

Domain Names Go Creative: Will We Soon See Dot-Poker?

Griffin Finan of Ifrah Law recently had an article about Domain Names published in The National Law Review:

Domain names on the Internet are about to get much more varied and creative. Soon websites will not just end in the few familiar suffixes like “com” or “edu,” but could end in things like “.movie” or ”.lawyer” or “.lol.”

On Wednesday, the Internet Corporation for Assigned Names and Numbers (ICANN), the organization tasked with regulating Internet domain names, released a list detailing who has applied for new suffixes, also known as top-level domains (TLD). This is the third major expansion ICANN has allowed of domain name suffixes, in addition to a few others that have been allowed on an ad hoc basis. The new system will streamline the application process and allow for up to 1,000 new domain suffixes a year.

The application process allowed companies to apply for their own brand name to use as their domain suffix name. For instance, Apple applied for the “.apple” suffix. Amazon applies for 76 names including “.amazon” and “.zappos.” Google applied for over 100 suffixes, including “.google” and “.youtube,” as well as “.lol,” and “.book.”

An interesting development related to the world of online gaming is that four groups applied for domain names that would end in “.poker.” The companies that applied for the “.poker” suffix are U.S.-based Binky Mill, LLC and Dot Poker, LLC as well as European-based dot Poker Limited and Afilias Domains No. 5. Limited.

Now that the initial list of applicants for TLD’s has been released, the public will have 60 days to comment. This time period will allow for companies and organizations to see whether others’ applications conflict with their interests or their intellectual property. After conflicts are resolved, there will be an appeals process. The new addresses likely will not launch until next year.

It remains to be seen whether these new domain extensions will become popular. Some companies may be able to capitalize on the marketing opportunities presented by the new TLD’s and other generic TLD’s that could become much more common. In any event, domain names are surely going to be more creative starting very soon.

© 2012 Ifrah PLLC

Retail Law Conference 2012

The National Law Review is pleased to bring you information about the upcoming Retail Law Conference:

at the Westin Galleria in Dallas, Texas

November 7-9, 2012

This event is the perfect opportunity to discuss the latest issues affecting the retail industry while obtaining important continuing legal education (CLE) credits.

Open to retail and consumer product general counsel, senior legal executives and in-house attorneys and their teams, the exceptional dialogue presented at this conference will help your organization navigate the current legal landscape of the industry.

A Betrayal Among Friends: Privacy Issues Surrounding Posts on Facebook

Melissa V. Skrocki of Giordano, Halleran & Ciesla, P.C. recently had an article regarding Facebook Privacy published in The National Law Review:
Exactly what protections should be granted to individuals who post information on Facebook?  This was the question before the US District Court of NJ at a summary judgment hearing in the case of Deborah Ehling v. Monmouth-Ocean Hospital Service Corp., et al., 2012 BL 131926 (D.N.J. May 30, 2012).   The Plaintiff was an employee of Monmouth-Ocean Hospital Service Corporation (“MONOC”) and also served as the Acting President of the local union for Professional Emergency Medical Services Association – New Jersey.   In her union role, she filed multiple complaints against MONOC that she claims initiated MONOC’s retaliatory conduct against her.

The Plaintiff maintained a Facebook account during the term of her employment with MONOC and designated a number of her co-workers as friends on the website.  The Plaintiff stated in her complaint that MONOC “gained access to Ms. Ehling’s Facebook account by having a supervisor(s) summon a MONOC employee, who was also one of Mr. Ehling’s Facebook friends, into an office” and “coerc[ing], strongerarm[ing], and/or threaten[ing] the employee into accessing his Facebook account on the work computer in the supervisor’s presence.” Id. at 2 citing  Am. Compl. 20.   The MONOC supervisor viewed and copied numerous postings by the Plaintiff including one regarding a shooting at the Holocaust Museum in Washington D.C. in which the Plaintiff posted:

An 88 yr old sociopath white supremacist opened fire in the Wash D.C. Holocaust Museum this morning and killed an innocent guard (leaving children).  Other guards opened fire. The 88 yr old was shot. He survived.  I blame the DC paramedics. I want to say 2 things to the DC medics. 1. WHAT WERE YOU THINKING? and 2.  This was your opportunity to really make a difference! WTF!!!! And to the other guards…go to target practice.

Id. at 2 citing Certificate of Elizabeth Duffy Ex. C, ECF No. 11.   On June 17, 2009, MONOC sent notice of the Plaintiff’s Facebook post claiming concern for a disregard of patient safety to the New Jersey Board of Nursing and the New Jersey Department of Health, Office of Emergency Medical Services.  The Plaintiff then brought her suit against MONOC in which, among other claims, she alleged a violation of the New Jersey Wiretapping and Electronic Surveillance Control Act (“NJ Wiretap Act”) and a common law invasion of privacy, for which MONOC moved for dismissal of each complaint.

The Plaintiff maintains that the Defendant violated the NJ Wiretap Act by the unauthorized accessing and monitoring of the Plaintiff’s electronic communications stored in her Facebook account.   An individual will violate the NJ Wiretap Act if that person: “(1) knowingly accesses without authorization a facility through which an electronic communication service is provided or exceeds an authorization to access that facility, and (2) thereby obtains, alters, or prevents authorized access to a wire or electronic communication while that communication is in electronic storage.” N.J.S.A 2A:156A-27(a).   The NJ courts have determined that the NJ Wiretap Act does not apply where the communication was received by the recipient, stored by such recipient and then retrieved or viewed by another without permission because “the strong expectation of privacy with respect to communication in the course of transmission significantly diminishes once transmission is complete.” White v. White, 344 N.J. Super. 211, 200 (Ch. Div. 2001).

The Court dismissed Plaintiff’s NJ Wiretap Act claim because the Plaintiff failed to allege that the Defendant viewed Plaintiff’s post during transmission.  The Court found that the Plaintiff’s comments were clearly in post-transmission storage when they were accessed by the Defendant and as such, the NJ Wiretap Act does not apply.

The Plaintiff further claimed that the Defendant committed a common law invasion of her privacy by accessing her Facebook page without permission. In order to establish a claim for invasion of privacy under New Jersey law, a plaintiff must be able to prove that: “(1) her solitude, seclusion, or private affairs were intentionally infringed upon, and that (2) this infringement would highly offend a reasonable person.” Ehling at 5 citing Bisbee v. John C. Conover Agency Inc., 186 N.J. Super. 335, 339 (App. Div. 1982).   The Plaintiff maintains that she had a reasonable expectation of privacy in her posts on the Facebook site because she had limited access to her account to those individuals deemed “friends” on the website.  Accordingly, Plaintiff maintains that her comments were not generally available to the public. Conversely, the Defendant disputes that such an expectation of privacy can arise when the Plaintiff made her post available to “dozens, if not hundreds, of people.” Ehling at 6.

The Court considered the emerging privacy issues which surround social networking sites.  It noted that:

On one end of the spectrum, there are cases holding that there is no reasonable expectation of privacy for material posted to an unprotected website that anyone can view. On the other end of the spectrum, there are cases holding that there is a reasonable expectation of privacy for individual, password-protected online communication.

Id. at 5 (emphasis and internal citations omitted).   Despite the clear boundaries on the continuum of online privacy issues, the courts have not come to a clear consensus regarding the expectations of privacy for those communications which fall somewhere in between public websites and password-protected email accounts.  Most courts acknowledge that a communication may still be considered to be private even if it has been disclosed to one or more persons.  Interestingly though, the answer of question as to how many people must know a fact before it is considered public varies greatly among the courts.  As reported by the Ehling Court, in Multimedia Wmaz v. Kuback, the court found that disclosure of information by the plaintiff to sixty people did not render it public. Id. at 6 citingMultimedia Wmaz v. Kuback,  212 Ga. App. 707, 7-0 & n. 1 (Ga. Ct. App. 1994).  Conversely, the Eight Circuit found that the plaintiff did not have an expectation of privacy when she shared certain information with two of her coworkers. Id. at 6 citing Fletcher v. Price Chopper Foods of Trumann, Inc. (8th Cir. 2000).

Given the unsettled nature of this area of law, the Court rejected the Defendant’s motion to dismiss the Plaintiff’s violation of privacy claim and will hear arguments on this point during the trial.

It will be interesting to see where the NJ District Court falls within the privacy continuum but one thing is clear: it is best to follow the advice of Facebook, “Always think before you post. Just like anything else you post on the web or send in an email, information you share on Facebook can be copied or re-shared by anyone who can see it.”

© 2012 Giordano, Halleran & Ciesla, P.C.

Generic Top-Level Domain Names Summit

The National Law Review is pleased to bring you information about the upcoming Generic Top-Level Domain Names Summit:

World Research Group is proud to announce the Generic Top-Level Domain Names Summit : The Challenges and Opportunities Facing the Financial, Pharmaceutical, Consumer Goods, and Other Branding Companies Since ICANNs Program, which will be held onSeptember 13, 2012 in Los Angeles, California. This event will discuss the implications and affects of ICANN’s new top level domain program, the risk and opportunities presented by this revolutionary transformation, and discovering what the next steps are for these companies.

California Court Enforces Waivers of Class and Private Attorneys General Act “PAGA” Representative Claims

The National Law Review recently published an article regarding PAGA Representative Claims written by Labor & Employment Practice of Morgan, Lewis & Bockius LLP:

Recent court decision represents significant development for parties seeking to enforce arbitration agreements containing class and representative waivers.

On June 4, a unanimous panel of the California Court of Appeal for the Second District upheld a lower court’s ruling compelling individual arbitration of a plaintiff’s wage and hour claims and dismissing both class and representative claims under the California Labor Code Private Attorneys General Act (PAGA). Iskanian v. CLS Trans. Los Angeles, LLC, — Cal. Rptr. 3d —, No. B235158, 2012 WL 1979266 (Cal. Ct. App. 2d Dist. June 4, 2012). In so ruling, the court (i) held that the U.S. Supreme Court’s opinion in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (Concepcion), preempted any California law prohibiting arbitration of certain claims; (ii) rejected a recent decision from the National Labor Relations Board (NLRB); and (iii) held that employees may validly waive their right to bring PAGA claims on behalf of others as part of an arbitration agreement.

Background

As a driver for defendant CLS Transportation, LLC (CLS), plaintiff Arshavir Iskanian signed a “Proprietary Information and Arbitration Policy/Agreement” providing that any and all employment-related disputes would be submitted to binding arbitration. The arbitration agreement contained a waiver of the right to bring claims on behalf of a class or as a representative of others.

Notwithstanding this arbitration agreement, Iskanian filed a putative class action complaint against CLS, alleging that the company failed to pay overtime, provide meal and rest breaks, reimburse business expenses, provide accurate and complete wage statements, and pay final wages in a timely manner. CLS moved to compel arbitration, which the trial court initially granted. Shortly after the trial court issued its order, the California Supreme Court issued its opinion in Gentry v. Superior Court (Circuit City Stores), 42 Cal. 4th 443 (2007), holding that class action waivers in employment arbitration agreements were unenforceable as contrary to public policy. On appeal, CLS’s initial motion to compel arbitration was reversed, and the case proceeded to litigation in Superior Court.

Soon after the U.S. Supreme Court issued its opinion in Concepcion, which overruled California law in regards to class action waivers in commercial contracts, CLS renewed its motion to compel arbitration. The trial court granted the motion, and a second appeal followed.

Gentry Overruled

On appeal, the court affirmed, holding that Concepcion overruled Gentry and rejecting the plaintiff’s “vindication of statutory rights” argument. Finding that a purported intent to vindicate statutory rights “is irrelevant in the wake of Concepcion,” the court held that “[t]he sound policy reasons identified in Gentry for invalidating certain class waivers are insufficient to trump the far-reaching effect of the [Federal Arbitration Act (FAA)].” Iskanian, 2012 WL 1979266 at *5. Thus, the court held that any California statute or policy prohibiting arbitration of certain claims is invalid, and that under the FAA, class and representative waivers should be enforced according to their terms “so as to facilitate streamlined proceedings.” Id.

Rejection of D.R. Horton

The court also rejected the plaintiff’s argument that a recent decision by two members of the NLRB in D.R. Horton, Inc., 357 NLRB No. 184 (2012), barred enforcement of class and representative waivers in employment arbitration agreements as a violation of Section 7 of the National Labor Relations Act (NLRA).

Finding several faults with the D.R. Horton decision, the Iskanian court declined to give any deference to the NLRB, noting that “the FAA is not a statute the NLRB is charged with interpreting.” Iskanian, 2012 WL 1979266, at *6. The court instead followed the Supreme Court’s binding authority in CompuCredit Corp. v. Greenwood, 132 S. Ct. 665 (2012), that, unless the FAA is “overridden by a contrary congressional command,” then “agreements to arbitrate must be enforced according to their terms.” Iskanian, 2012 WL 1979266, at *7. Finding no such “congressional command” in the NLRA, the court rejected D.R. Horton. Id.

PAGA Waivers Enforceable

Departing from two prior decisions issued by other California Courts of Appeal, theIskanian court held that the representative action waiver of PAGA claims in the parties’ arbitration agreement was enforceable under Concepcion. The court compelled individual arbitration of the plaintiff’s PAGA claim, holding that “any state rule prohibiting the arbitration of a PAGA claim is displaced by the FAA.” Id. at *9. The court further held that California’s “Broughton-Cruz rule”—which bars arbitration of public injunctive relief actions—has been overruled by Concepcion. Accordingly, “the public policy reasons underpinning the PAGA do not allow a court to disregard a binding arbitration agreement. The FAA preempts any attempt by a court or state legislature to insulate a particular claim from arbitration.” Id. The court concluded that the plaintiff could not pursue representative claims against CLS.

Implications

The Iskanian decision, when coupled with another recent California opinion,Kinecta Alternative Financial Solutions, Inc. v. Superior Court (Malone), 205 Cal. App. 4th 506 (2012), which held that class allegations may be dismissed when a court compels individual arbitration, represents a significant development for parties seeking to enforce arbitration agreements containing class and representative waivers.

The Iskanian decision, however, creates a clear split in authority among California Courts of Appeal regarding the enforceability of PAGA representative action waivers. See, e.g., Brown v. Ralphs Grocery Co., 197 Cal. App. 4th 489 (2d Dist. 2011) (holding that PAGA waivers were not enforceable); Reyes v. Macy’s, Inc., 202 Cal. App. 4th 1119 (1st Dist. 2011) (following Brown and refusing to compel individual arbitration of PAGA claims). This split may lead to California Supreme Court review, which means that the issue may not be resolved anytime soon.

While awaiting a final outcome, employers should carefully consider enforcement of arbitration agreements and the scope of waivers contained in such agreements.

Copyright © 2012 by Morgan, Lewis & Bockius LLP