White Collar Crime Institute – March 6-8, 2013

The National Law Review is pleased to bring you information about the upcoming White Collar Crime Institute:

White Collar Crime March 6-8 2013

The program will provide an in-depth analysis of three recent high visibility trials by the lawyers involved in the cases.  The many topics covered will include: ethical pitfalls and blunders in white collar practice, conducting global investigations (including issues of competing laws), data privacy and blocking statutes, trial tactics in white collar cases, Brady obligations, international issues in white collar practice (including obtaining evidence abroad), handling of, and dealing with, issues related to electronically stored materials, sentencing guidelines and arguing for a departure, updates and trends in securities and FCPA enforcement, and more!

Bid-Rigging Remains Focus of DOJ Antitrust Criminal Enforcement: Businesses Need to Ensure Their Compliance

Sills-Cummis-Gross-607x84

A number of recent U.S. Department of Justice Antitrust Division (“Antitrust Division”) press releases highlight the agency’s ongoing criminal enforcement initiatives regarding hard-core antitrust violations such as bid-rigging. Businesspersons often seem to forget that the nation’s antitrust laws carry both civil and criminal penalties. Provisions of both the Sherman Antitrust Act (15 U.S.C. §§ 1-7) and Clayton Act (15 U.S.C. §§ 12-27), the primary federal antitrust statutes, include significant criminal penalties that can be imposed against violators. The statutes do not state what specific violations should result in criminal penalties or the factors to be used in determining when such penalties apply. However, historically, the Antitrust Division (which has exclusive responsibility for criminal enforcement of the federal antitrust laws) has focused its criminal enforcement efforts on so-called hard-core per seviolations of Section 1 of the Sherman Antitrust Act (15 U.S.C. § 1). The recent Antitrust Division press releases announcing guilty pleas, convictions and sentencings of individuals involved in hard-core antitrust violations suggest that the Antitrust Division is, and will be, aggressively pursuing such criminal enforcement, especially regarding the financial industry, for at least the next several years.

Criminal Penalties For Hard-Core Antitrust Violations Are Substantial

Section 1 of the Sherman Antitrust Act prohibits contracts, combinations and conspiracies in restraint of interstate trade or commerce. The maximum criminal penalties for corporations and individuals under this statute are substantial:

Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.

15 U.S.C. § 1. Although the maximum $100 million fine for corporations and $1 million fine for individuals may seem stiff enough, the Antitrust Division has also obtained larger maximum fines by arguing that 18 U.S.C. § 3571(d) allows the maximum fine to be increased to twice the gain derived from the violation or twice the loss suffered by the victims if either amount is greater than the statutory maximum.

The Antitrust Division’s 2012 fiscal year (which ended on September 30, 2012) proved to be a record-breaking year regarding criminal fines. The Antitrust Division obtained criminal fines of $1.1 billion in FY2012, the second time it had topped the $1 billion mark since 2003 (the other time was FY2009 when the Antitrust Division obtained criminal fines of $1 billion). The figure for the recently ended fiscal year rises to approximately $1.35 billion when other monetary remedies that the Antitrust Division has obtained, such as disgorgement, restitution and other penalties, are included. In the past two years, the Antitrust Division has been pursuing these other so-called “equitable monetary remedies,” more aggressively. In FY2009, the Antitrust Division filed 72 criminal cases. In FY2012, it filed 67 criminal cases, down from 90 in FY2011. Thus, it is clear that the Antitrust Division is aggressively pursuing, and obtaining, larger fines and monetary remedies against antitrust violators.

In addition, the Antitrust Division has announced that the average prison sentence it has obtained for criminal antitrust violations has been increasing. For fiscal years 2010-2012, the average prison sentence obtained has been 25 months, up from 20 months for fiscal years 2000-2009 and 8 months for fiscal years 1990-1999. In terms of total prison days sentenced, the increase is from an average of 3,313 days for fiscal years 1990-1999, to 12,722 for fiscal years 2000-2009, to 23,398 for fiscal years 2010-2012. Thus, the Antitrust Division has also been successful in obtaining longer prison sentences for individuals who have engaged in per se antitrust violations.

In light of the increasing magnitude of the criminal penalties for hard-core antitrust violations, both corporations and businesspersons must be zealous in their efforts to avoid practices that run afoul of the antitrust laws, especially hard-core per seviolations of Section 1 of the Sherman Antitrust Act that prohibits contracts, combinations and conspiracies in restraint of trade.

Bid-Rigging Is A Per Se Antitrust Violation Often Leading To Criminal Enforcement

So-called per se antitrust violations are practices that historically have been shown to result in harm to competition. They are practices that require little or no economic analysis to determine their negative impact on consumers and/or the competitive process. These violations normally include price-fixing, bid-rigging, and customer or market allocations – i.e., agreements among two or more competitors to eliminate the competition among them so that the participants often obtain higher prices for their products or services.

Bid-rigging is the very antithesis of what should be a competitive bidding process. The entity holding the bidding process – often federal, state, or local governments – is attempting to obtain the best bid (in terms of prices, services, quality, etc.) by soliciting bids from competing providers. It would seem to be common sense that such competitors should not collude or agree to subvert the bidding process by coordinating their bids in some fashion so that the outcome is skewed toward the conspirators’ desired result. However, as the Antitrust Division’s recent press releases show, bid-rigging is still a common practice in some industries. Bid-rigging conspiracies can take many forms, including (i) certain competitors agreeing not to bid so that the conspirators’ chosen competitor will win the bid; (ii) certain competitors submitting purposely inflated bids to give the appearance of a competitive bidding process; and (iii) the conspirators rotating which competitor will be the low bidder. No matter the form, the goal of almost all bid-rigging schemes is that the participants hope to ensure the winning bidder is their chosen participant and the elimination of competition among the conspirators regarding the bidding process.

Obviously, given the nation’s economic woes in recent years, the pressure to maximize profits and secure business can lead businesspersons to make poor decisions regarding their business practices, but certain of the recent enforcement actions have related to bid-rigging conspiracies that took place over numerous years, including prior to the current economic downturn. Whether it is the familiarity with their competitors that businesspersons often gain after years of pursuing the same customers and contracts, or the importance of each long-term or financially sizable contract that is being pursued, businesspersons still engage in bid-rigging practices at a level that it would seem they should not, given the substantial criminal penalties (and prison time) they, and their companies, face for such practices.

Recent Bid-Rigging Enforcement By The Antitrust Division

Just since August 2012, the Antitrust Division has announced convictions, guilty pleas and sentencings regarding bid-rigging practices in several industries, including bidding for contracts for the proceeds of municipal bonds, public foreclosure auctions, municipal tax lien auctions, and the automobile anti-vibration rubber parts industry. The investigation and prosecution of bid-rigging conspiracies often involve joint efforts by the Antitrust Division, the FBI and the U.S. Attorneys’ Office. Indeed, regarding the first three industries – municipal bonds, public foreclosure auctions, and municipal tax lien auctions – the enforcement actions were the result of President Obama’s Financial Fraud Enforcement Task Force “created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.”http://www.justice.gov/atr/public/press_releases/2012/290188.htm. The Task Force includes “more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, . . . [and] [o]ver the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.” Id. Such inter-agency coordination at the federal, state and local level highlights the aggressive nature of the efforts to identify and prosecute financial crimes, including criminal antitrust violations such as bid-rigging schemes.

Foreclosure Auctions

The Antitrust Division has obtained guilty pleas from numerous real estate investors who participated in separate bid-rigging conspiracies (taking place at various times from 2001 to 2010) at public foreclosure auctions, including agreeing not to bid against one another and selecting a designated winning bidder or agreeing to bid at suppressed prices, in Alabama, North Carolina and Northern California. The Antitrust Division has stated that such conspiracies “cause financial institutions, homeowners and others with a legal interest in rigged foreclosure properties to receive less than the competitive price for the properties.” http://www.justice.gov/atr/public/press_releases/2012/290188.htm.

Municipal Bonds

The Antitrust Division obtained the conviction of at least six former financial services executives for their participation in conspiracies related to bidding for contracts for the investment of municipal bond proceeds and other municipal finance contracts. The conspiracies took place from 1999 through 2006 and involved collusion by financial institutions regarding investment agreements offered to state, county and local governments and agencies that the government entities used to raise money for public projects. The Antitrust Division alleged that the conspiracies resulted in the government entities’ obtaining non-competitive interest rates for the investment agreements that cost them millions of dollars.

Municipal Tax Lien Auctions

The Antitrust Division obtained the guilty plea of a Pennsylvania corporation that participated in a conspiracy to rig bids for the sale of tax liens auctioned by municipalities throughout New Jersey. From at least 1998 through 2006, the conspirators allocated bids such that the winning bidder obtained a higher interest rate for the tax lien, to the detriment of the homeowner who had failed to pay property taxes. The Antitrust Division has obtained 10 guilty pleas from the ongoing investigation.

Automobile Anti-Vibration Rubber Parts

The Antitrust Division has obtained guilty pleas, or agreements to plead guilty, from nine companies and 12 executives as a result of an ongoing investigation regarding price-fixing and bid-rigging in the automobile anti-vibration rubber parts industry. As part of a conspiracy that took place from at least 2005 through 2011, the conspirators agreed, in part, to submit noncompetitive bids for parts contracts.

Regular Antitrust Training And Rigorous Oversight Are the Key To Avoiding Violations

These recent enforcement actions and ongoing investigations highlight the need for companies and businesspersons to be knowledgeable about the antitrust laws and vigilant in their compliance with these laws. In light of the significant criminal penalties for corporations and individuals stemming from bid-rigging violations of the antitrust laws, companies should increase their training and oversight of their employees with responsibility for competitive bidding processes. Regularly scheduled training sessions should emphasize the types of unlawful bid-rigging practices that violate the antitrust laws. In addition, companies should perform regular audits of their bidding efforts and the bidding-related activities of the businesspersons responsible for such bids. Such audits should include a rigorous review of entertainment and expense reports that might indicate meetings with businesspersons from competitors that may lead to, or be in furtherance of, anticompetitive bid-rigging conspiracies. The cost of lax oversight may be significant for the company and its employees.

This article appeared in the January 2013 issue of The Metropolitan Corporate Counsel.  

Copyright © 2012 Sills Cummis & Gross P.C.

Rainmaker Retreat: Law Firm Marketing Boot Camp

The National Law Review is pleased to bring you information about the upcoming Law Firm Marketing Boot Camp:

WHY SHOULD YOU ATTEND?

Have you ever gone to a seminar that left you feeling motivated, but you walked out with little more than a good feeling? Or taken a workshop that was great on style, but short on substance?

Ever been to an event that was nothing more than a “pitch fest” that left a bad taste in your mouth? We know exactly how you feel. We have all been to those kinds of events and we hate all those things too. Let me tell you right up front this is not a “pitch fest” where speaker after speaker gets up only trying to sell you something.

We have designed this 2 day intensive workshop to be content rich, loaded with practical content.

We are so confident you will love the Rainmaker Retreat that we offer a 100% unconditional money-back guarantee! At the end of the first day of the Rainmaker Retreat if you don’t believe you have already received your money’s worth, simply tell one of the staff, return your 70-page workbook and the CD set you received and we will issue you a 100% refund.

We understand making the decision to attend an intensive 2-day workshop is a tough decision. Not only do you have to take a day off work (all Rainmaker Retreats are offered only on a Friday-Saturday), but in many cases you have to travel to the event. As a business owner you want to be sure this is a worthwhile investment of your time and money.

WHO SHOULD ATTEND?

Partners at Small Law Firms (less than 25 attorneys) Solo Practitioners and Of Counsel attorneys who are committed to growing their firm. Benefits you will receive:

Solo practitioners who need to find more clients fast on a shoe-string budget. In addition to all the above benefits, solo attorneys will receive these massive benefits:

Law Firm Business Managers and Internal Legal Marketing Staff who are either responsible for marketing the law firm or manage the team who handles the law firm’s marketing. In addition to all the above benefits, Law Firm Business Managers and Internal Legal Marketing Staff will also receive these benefits:

Of Counsel Attorneys who are paid on an “eat what you kill” basis. In addition to all the above benefits, Of Counsel attorneys will also receive these benefits:

Associates who are either looking to grow their book of new clients in the next 6-12 months or want to launch their own private practice. In addition to all the above benefits, Associates will also receive these benefits:

Our Top 10 Labor Law Events of 2012

The National Law Review recently published an article by Gerald F. Lutkus with Barnes & Thornburg LLP titled, Our Top 10 Labor Law Events of 2012:

Barnes & Thornburg

 

The Mayans predicted that the world would end in 2012. They were wrong. However, U.S. employers may well be feeling like life is over as they once knew it after the head-spinning events of 2012 in traditional labor law. And the scary thing is, the NLRB has just gotten started, folks, as it enters 2013 with a three-member majority, all of whom are pro-Union Democratic appointees.

Your friends at BTLaborRelations.com have decided to again ring out the old year with our unscientific ranking of the Top 10 Labor Law events of the past year. After putting our heads together, here’s what we came up with:

10. D.R. Horton and Arbitration Agreements. The Board started the year with an astonishing ruling that an arbitration agreement containing a class action waiver violated the NLRA because it infringed on the right employees have to “engage in concerted action for mutual aid or protection.” The Board has stood by its decision and recently followed it in an advice memo despite the fact that the Supreme Court and the Courts of Appeals are – so far – turning a cold shoulder to it.

 

You can read our previous coverage of D.R. Horton by clicking on the following links:

9. Ho Ho’s and Hockey. Labor disputes have resulted in the shutdown of one American tradition and has caused a lock-out in another. As previously reported here, after the Bakers Union turned down a concessionary contract, Hostess announced that it was closing its doors and liquidating the Company. While out on the ice, the lights have remained off as the NHL and the NHLPA have continued to struggle to reach an agreement on a new collective bargaining agreement. Today is Day 104 of the lock-out. Here are links to our coverage of the lock-out.

8. Recess Appointments. The President’s recess appointments of NLRB members continue to be the issue that won’t go away. On Dec. 5, 2012, oral argument in Noel Canning v. NLRB was held before a three-judge panel of the United States Court of Appeals for the D.C. Circuit. At issue is whether the appointments were legal. If the appointments were not legal, then it calls into question whether under New Process the NLRB had a quorum to act. Our prior posts on this topic can be found here.

7. Off-Duty Access. In Sodexo America, the Board ruled that a hospital policy restricting employees’ off-duty access violated Section 8(a)(1) of the NLRA. USC University Hospital in Los Angeles had an Off-Duty Access Policy which provided that off-duty employees were not allowed to enter or re-enter the interior of the Hospital or any other work areas outside the Hospital except to visit a patient, receive medical treatment or to conduct hospital-related business. The Board found that policy to be overbroad and interfered with employee rights under Section 7 of the Act. Our prior post on this topic can be found here.

6. Quickie Elections and NLRB Posting Rules. The NLRB’s actions in promulgating new posting requirements and revising the election rules to create a “quickie” or “ambush” election made our Top 10 of 2011. And they’re back again because both of those initiatives have been held up by Court action and are still in litigation and on appeal. Perhaps 2013 will be the year when we finally know whether the rules are legal and will be applied or were unlawfully promulgated. Stay tuned. You can access all of our prior postings on these issues here and here.

5. Dues Deductions. The NLRB’s relentless march towards dismantling years and years of U.S. labor law continued this month when the Board overruled its own 50-year old policy on whether dues must be withdrawn from employee checks after the expiration of a collective bargaining agreement. The Board, on Dec. 12, 2012, overruled its Bethlehem Steel decision from 1962 and held that after the expiration of a CBA, an employer will continue to be obligated to withdraw dues from employee checks and forward them to the union.

4. At-Will and Confidentiality Provisions. The Board continued to press its authority and jurisdiction over non-union workplaces in decisions dealing with routine at-will disclaimer acknowledgments and confidentiality policies for internal employer investigations. The Board has found both to be violative of employee rights under Section 7 of the Act. Board action in both of these areas is forcing employers to closely examine at-will disclaimers and the manner in which they conduct internal investigations. Here are our previous posts on these subjects.

3. The Holiday Blitzkrieg. The Board’s holiday gift to U.S. organized labor didn’t go unnoticed. In an avalanche of game-changing rulings, the Board acted to “gut” Beck rights for dues protestors; required employers to deduct union dues even after contract expiration dates; exerted jurisdiction over teachers in charter schools; required employers to pay taxes and social security costs on backpay awards; required bargaining over discretionary discipline in the time frame between union recognition and enactment of a first contract; overturned “Facebook firings”; and overturned a well-settled rule that protected witness statements from disclosure to the union.

2. Social Media. The Board clearly identified social media as a priority issue in 2012. During the year, Acting GC Lafe Solomon issued three separate guidance memos on social media in which the agency made it clear that it viewed most employer restrictions on off-duty work-related social media chatter to interfere with employee rights to engage in protected concerted activity. We’ve written about this issue repeatedly during 2012. You can find out prior posts here.

1. Right to Work. After years and years of no progress on Right to Work legislation, amazingly and somewhat surprisingly, Indiana and Michigan during 2012 became the 23rd and 24th states in the U.S. to pass Right to Work laws. Both are also the first Rust Belt states to pass the legislation. The actions of both states underscore the disconnect that is occurring in labor policy in the U.S. As federal labor policies continue to accelerate to the left, states such as Indiana, Michigan, Ohio, Wisconsin and Arizona try to hold the line. Looking forward to 2013, the dramatically differing directions of state and federal labor policy may prove to be one of the most interesting stories of the coming year.

© 2012 BARNES & THORNBURG LLP

Operational and Technical Changes for FACTA Compliance – January 30 – February 1, 2013

The National Law Review is pleased to bring you information about the upcoming Global Financial Markets – Operational and Technical Changes for FACTA Compliance:

key topics

  • Assess the full implications of the finalized FATCA regulation
  • Coordinate an optimal approach to operational, infrastructural and technical changes under FATCA
  • Identify strategies to effectively manage client accounts
  • Integrate existing internal procedures with FATCA compliance
  • Understand what is expected by the IRS

key features

  • Pre-Conference Workshop on January 30, 2013 for an Additional Cost:
  • Pre-Conference Workshop: The Intergovernmental Agreements: Changing the Face of International Tax lead by JP&MF Consulting and Mopsick Tax Law LLP

event focus

FATCA is amongst the biggest topics of debate in financial institutions across the globe. The effect that it will have on these institutions cannot be underestimated and its operational impact on the existing systems is set to be both time consuming and costly. The ability to successfully align all key stakeholders, including operations, technology, risk, legal and tax, will determine the ultimate cost of FATCA compliance. Moving on from mere interpretive matters, this GFMI conference will not only address key FATCA requirements but also discuss the practical impacts of IGAs and strategies for achieving operational and infrastructural efficiency.

The Operational and Technical Changes for FATCA Compliance Conference will be a two and half day, industry focused event, specific to Senior Executives working in Banks, Insurance and Asset Management Companies. Attendees will address key FATCA requirements, while discussing the practical implications of IGAs and strategies for achieving operational and infrastructural efficiency.

Key Themes of the Operational and Technical Changes for FATCA Compliance Conference Include:

1. Challenges of FATCA regulations and prospects for the final regulation

2. Achieving operational and infrastructural efficiency

3. Coordinating existing AML/KYC procedures with FATCA compliance

4. FATCA from the FFI’s perspective 5. Beyond banking: the challenges of FATCA implementation

6. Coping with the withholding obligation under FATCA

This is not a trade show; our conference series is targeted at a focused group of senior level executives to maintain an intimate atmosphere for the delegates and speakers. Since we are not a vendor driven conference, the higher level focus allows delegates to network with their industry peers.

New Year, New Laws for California Employers – Added Whistle-blower Protections, With Whom Will the EDD Share Employer Reports and Contracts with Commission Employees

The National Law Review recently published an article by Mark E. Terman of Drinker Biddle & Reath LLP regarding New Laws for California Employers:

DrinkerBiddle

 

Continuing with our series “New Year, New Laws for California Employers,” we take a look at newly added whistle-blower protections, with whom the EDD will share employer reports and contracts with commission employees.  Prepared by  Mark Terman, partner in the Los Angeles office, this series looks at some of the significant new regulations becoming law in 2013 affecting private employers doing business in California.

Added Whistle-blower Protections

The California False Claims Act prohibits submission to the government of a false claim for money, property or services, and authorizes actions for treble damages and penalties. An example could be charging a government entity for goods or services that were not provided.

Employees, as “relators,” can inform the government or law enforcement, participate in these actions after satisfying certain requirements and share in the recovery.  Employers cannot prevent employees from disclosing information to the government or law enforcement agency, or from acting in furtherance of a false claims action.  There are similar statutes under federal law.

AB 2492 provides that contractors and agents can also be whistle-blowers under Cal-FCA.  The new law also makes clear that retaliation for trying to prevent a false claim is prohibited, and that relief in a whistleblower or “Qui Tam” action can include reinstatement, double back-pay, interest on the back pay, special damages, punitive damages and attorneys’ fees.

With Whom Will the EDD Share Employer Reports?

Existing law requires employers to provide employee wage information, new employee information and new independent contractor information to the Employment Development Department for use in the administration of tax and unemployment insurance.

We are entering an era of enhanced information sharing designed to make government agencies more effective in enforcing tax and other laws, including billions of dollars that state agencies believe are lost in tax revenue due to improper classification of independent contractors. AB 1794 now permits the EDD to share employer and employee information with the Joint Enforcement Strike Force on the Underground Economy for the purposes of auditing, investigating and prosecuting violations of tax and cash-pay reporting laws and other agencies.

The strike force includes the EDD; Department of Industrial Relations, Division of Labor Standards Enforcement and Division of Occupational Safety and Health; Contractors’ State License Board; Department of Insurance, State Compensation Insurance Fund; and Department of Justice (see www.edd.ca.gov/payroll_taxes).  Information sharing is also permitted with the California Department of Health Care Services, the California Health Benefit Exchange, the Managed Risk Medical Insurance Board, county departments and agencies, the Agricultural Labor Relations Board, the Franchise Tax Board and the State Board of Equalization.

Contracts with Commission Employees

Enacted in 2011, Labor Code Sec. 2751 becomes effective Jan. 1, 2013.  It requires an employer, when entering into a contract of employment calling for commissions as a method of payment, to create a contract that must be in writing and that describes the method of computation and payment of commissions. The employer must give a signed copy of the contract to the employee and obtain a signed receipt for the contract from the employee. If the contract expires and the parties nevertheless continue to work under the terms of the expired contract, the contract terms are presumed to remain in full force and effect until the contract is superseded or employment is terminated by either party.

“Commissions” generally mean the same as in Labor Code Sec. 204.1: “Compensation paid to any person for services rendered in the sale of such employer’s property or services and based proportionately upon the amount or value thereof.”

Commissions do not include: short-term productivity bonuses (such as are paid to retail clerks) and bonus and profit-sharing plans— unless there has been an offer by the employer to pay a fixed percentage of sales or profits as compensation for work to be performed. AB 2675 adds that temporary, variable incentive payments that increase commissions but do not decrease payment are not covered.

Read the rest of the series:

New Year, New Laws for California Employers – Employer Access to Social Media

New Year, New Laws for California Employers – Religious Dress and Grooming Protected and Breastfeeding Further Protected

©2012 Drinker Biddle & Reath LLP

ABA Winter Institutes – January 23-25 and February 14-15, 2013

The National Law Review is pleased to bring you information about the upcoming ABA Winter CLE Institutes:

ABA National Institutes

 

Learn and network at these live in-person seminars that draw lawyers from across the nation.  January National Institutes include the 2013 E-Discovery and Information Governance, January 23-25 in Tampa, FL.  February National Institutes include the 2013 Gaming Law Minefield, February 14-15 in Las Vegas, NV.

Internet Defamation—What Can You Do When You Are the Target?

McBrayer Logo

We’ve all seen them.  Anonymous spewing hate-filled, defamatory statements on Facebook and Twitter, as well as in the comment pages of news stories on both local and national news.  The commenters have a certain entertainment value, until you or your business are in their sights.  So what do you do?  The answer is not always so simple, especially when you don’t even know who is speaking.

Internet freedom has allowed for an unprecedented expansion in opportunities for the Average Joe to speak, but that expansion has come with a price for those defamed on the internet.  In order to foster a free and expansive internet, in 1996 Congress enacted Section 230 of the Communications Decency Act, 47 U.S.C. § 230.  Section 230 grants interactive internet service providers (such as Facebook, Yelp, YouTube, and Twitter) immunity from civil defamation claims for user-created content.

There are very few exceptions to Section 230 immunity, with the only one recognized in case law being a case in which provider Roommates.com directed the posts to a certain extent using drop-down menus.  See Fair Housing Council v. Roommates.com, LLC, 521 F.3d 1157 (9thCir. 2008).  Providers have learned from Roommates.com’s example and are careful to maintain their Section 230 immunity.

What this means in simple terms is that if you or your business is defamed on Facebook or Twitter, you can’t sue Facebook or Twitter, and you can’t force Facebook or Twitter to remove the defamatory postings.  Section 230 forces you to attempt to track down the user who originally posted the speech—often a virtual impossibility in this day and age when the vast majority of defamatory postings on the internet are done anonymously.

So what can you do?  First, don’t give up on social media and its ability to deal with at least some of the problems.  Interactive internet service providers are aware of the damage defamatory statements can do, and know that they risk losing their Section 230 immunity if they don’t self-police to a certain extent.  All interactive internet service providers have terms of service, and the majority ban defamatory and harassing speech.  Most will delete the offending material upon a showing that the material is indeed defamatory (i.e., not protected opinion), and most providers include a function allowing you to report the post directly from the webpage, without the need to send a demand letter from an attorney.

Furthermore, interactive internet service providers realize that though anonymity enjoys protections under the First Amendment, it also feeds a great deal of the ugliness seen on the internet today.  Facebook, for instance, requires posters to use their real names, and if Facebook is informed that a person is using a pseudonym, Facebook will disable the account.  Likewise, news sites are increasingly requiring commenters to link their comments to their Facebook accounts in order to provide a measure of accountability that anonymous posts lacked.  YouTube also recently began asking posters to use real names, though that is not currently a requirement.  Not all interactive internet service providers eschew anonymity – Twitter and Tumblr still tout the user’s ability to post anonymously – but increasing numbers of providers are requiring that speakers stand behind their comments.

If you can’t get posts removed through the interactive internet service provider, you still have legal options available.  Of course, quite often the best action at this point is no action.  Often defamation lawsuits are counterproductive in that they simply bring more attention to the posts than if the posts are simply ignored.  While difficult to do, sometimes ignoring a simply nasty post is the best policy.

If the post can’t be ignored but is not worth litigation, you can engage with the poster on the interactive site. If someone posts a negative review on Yelp, address the review and contest any factual misrepresentations.  If someone posts on your Facebook wall or sends an angry or defamatory Tweet, address the poster’s concerns.  You have the right to speak too, and quite often thoughtful, careful engagement is the best remedy.

Some posts are simply so egregious and damaging that they must be addressed in a court of law.  If action is warranted, and you are lucky enough to have the name of the poster, you can pursue traditional legal avenues available to victims of defamatory speech.

If you do not have the name, however, if you want to take action you will need to file a civil defamation lawsuit naming as defendant a John Doe.  Unfortunately, even though many interactive internet service providers will remove defamatory posts upon request, none will give up the names, email addresses, or IP addresses of posters without a subpoena.  Once litigation is filed, you and your legal counsel will have subpoena power to require the interactive internet service provider to give up the names, emails and IP addresses associated with the poster.  Normally the providers will still put up a fight even in light of a subpoena, but this is the only way available to obtain the identity of an anonymous poster so that you can hold them responsible for their defamatory speech.

While we have the right to free speech in the United States, our laws require us to take responsibility for what we say when we are wrong and our speech causes damage.  In the case of internet-based speech, it may be difficult to vindicate your rights and hold speakers responsible, but with persistence and a clear understanding of how interactive internet service providers work you can protect your good name on the internet.

© 2012 by McBrayer, McGinnis, Leslie & Kirkland, PLLC

ABA Gaming Law Minefield Conference – February 14-15, 2013

The National Law Review is pleased to bring you information about the upcoming ABA Gaming Law Minefield Conference:

ABA Gaming Law Feb 14-15, 2013

When

February 14 – 15, 2013

Where

  • Green Valley Ranch Resort & Spa
  • 2300 Paseo Verde Pkwy
  • Las Vegas, NV 89101
  • United States of America
 
The program will discuss revolutionary legal, regulator, and ethical issues confronting both commercial and Native American gaming.  Attendees will learn about global anti-corruption initiatives, Internet gaming, and the challenges faced by commercial and Native American gaming.

I’m Divorced, Now What?

Recently The National Law Review featured an article, I’m Divorced, Now What?, by Rebecca L. Palmer and Crystal Espinosa Buit of Lowndes, Drosdick, Doster, Kantor & Reed, P.A.:

Lowndes_logo

After you have finally made it through the divorce process and attend the final judgment hearing, the question often becomes, “Now what?”. Once a divorce is finalized, there are still many things that need to be considered. The following are some, but certainly not all, examples:

1. Transferring of Assets.  Often, parties come to an agreement regarding the division of assets and memorialize this in a written settlement agreement.  This document often contemplates who will be receiving certain bank accounts and other assets, and how these transfers are to occur.  In the “calm after the storm” it can be easy to forget that these actions need to occur – i.e. accounts divided and closed, personal property exchanged, and the like. This is important as deadlines by which these actions must be taken are often imposed in the written settlement agreements.  Furthermore, when vehicles are jointly titled, but only one party is receiving the vehicle as part of the equitable distribution of the assets, it is vital to transfer title in order to ensure the non-recipient former spouse no longer remains liable as a co-owner of the vehicle.  As the list of actions concerning distribution of assets can be lengthy, it is advisable to make a detailed “To-Do List” of all items that must be completed by you and/or your former spouse.

2. Taxes. Frequently, the settlement agreements entered into by parties will contemplate issues, including, but not limited to, child support, alimony, and liquidation of certain investments, that impact one or both parties’ taxes.  If a tax attorney and/or financial advisor was not consulted prior to the execution of a settlement agreement, it may be beneficial to meet with such experts to more accurately determine the tax effects set forth therein.

3. Estate Planning. It goes without saying that, after your divorce, you should meet with an estate planning attorney as soon as possible to address any estate planning issues that may have risen as a result of the dissolution of your marriage.

While the foregoing list is not exhaustive, as each divorce proceeding has its own set of unique circumstances, it is a helpful starting place.  Be sure to consider, however, the implications and actions required by any settlement agreement entered into by you in a divorce proceeding.

© Lowndes, Drosdick, Doster, Kantor & Reed, PA