Category: Communication Media & Internet

Service of Process through Social Media

The National Law Review recently featured an article, Service of Process through Social Media, written by Philip H. Cohen with Greenberg Traurig, LLP:

GT Law

 

In the matter of Federal Trade Commission v. PCCare247 Inc., Case No. 12 Civ. 7189 (PAE), 2013 WL 841037 (S.D.N.Y. March 7, 2013) (PCCare247), the United States District Court for the Southern District of New York sanctioned using social media as a means of circumventing the Hague Service Convention’s standard method of facilitating service among signatory states through designated Central Authorities. Granting the FTC’s motion for leave to effect service of documents by alternative means on defendants located in India, Judge Paul A. Engelmayer’s ruling appears to represent the first time a U.S. court has permitted service of process via Facebook.

In PCCare247, Indian defendants allegedly operated a scheme to convince American consumers that they should spend money to fix non-existent problems with their computers. After the Indian Central Authority was unable to formally serve the Indian defendants pursuant to the Hague Convention, the court granted the FTC’s request to serve process on the defendants by both email and through a Facebook account.

The FTC’s proposed service using Facebook presented the court with a novel issue.  Last year, another court in the Southern District of New York denied a motion to permit a party to effect service using Facebook because the plaintiff had not sufficiently established the credibility of the defendant’s Facebook account.  Fortunato v. Chase Bank USA, N.A., Case No. 11 Civ. 6608 (JFK), 2012 WL 2086950 (S.D.N.Y. June 7, 2012) (Fortunato).  Fortunato involved a domestic defendant accused of committing credit card fraud.  After several failed attempts at personal service, the court rejected the third-party plaintiff’s “unorthodox” proposal to serve process, including by Facebook, citing concerns about the lack of certainty and authenticity of the defendant’s purported Facebook profile.  The court questioned whether the Facebook profile was in fact operational and accessed by the party to be served, noting that the location listed on the profile was inconsistent with four potential addresses a private investigator had identified. The court opted instead for service by publication pursuant to New York rules.

Distinguishing  PCCare247 from  Fortunato, Judge Engelmayer articulated several considerations supporting his confidence in “service by Facebook.” The court observed that under Rule 4(f)(3) of the Federal Rules of Civil Procedure, a court remains free to order alternative means of service on an individual in a foreign country so long as the means of service are not prohibited by international agreement and comport with due process.  The court acknowledged that although service by email and Facebook is not enumerated in Article 10 of the Hague Service Convention, India has not specifically objected to them. Therefore, under Rule 4(f)(3) the court found that it was free to authorize process by these means provided that doing so would satisfy due process.

Recognizing that the reasonableness inquiry is intended to “unshackle[] the federal  courts from anachronistic methods of service and permit[] them entry into the technological renaissance,” quoting Rio Props., Inc. v. Rio Int’l Interlink, 284 F.3d 1007, 1017 (9th Cir. 2002), the court concluded that Facebook was “reasonably calculated to provide defendants with notice of future filings” in the case. In support of its conclusion, the court explained that the defendants ran an Internet-based  business and that the email addresses specified for the defendants were those used for various aspects of the  alleged scheme.  For two of the Indian defendants in PCCAre247, their Facebook accounts were registered to the same email addresses to be served. Moreover, the court had “independent confirmation” that one of the email addresses identified was genuine and operated by a defendant, because it had been used to communicate with the court on several occasions.  Additional evidence that the Facebook profiles were authentic included that some of the defendants listed their job titles at the defendant companies and that the defendants were  Facebook “friends” with each other. Additional considerations the court noted were: the FTC had made several good faith efforts to serve the defendants by other means; and defendants had already demonstrated knowledge of the lawsuit. Accordingly, the FTC’s proposal to serve process by both email and Facebook was a combination that satisfied due process as a means of alternative service and was highly likely to be an effective means of reaching and communicating with the defendants.

This decision suggests that under the right circumstances, where a party establishes a reasonable foundation for the authenticity of the accounts, service via email and social media may be an economical and effective option for serving process on foreign parties, or even domestic parties that are otherwise difficult to track down by traditional means.

©2013 Greenberg Traurig, LLP

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