Month: March 2010

March 31, 2010 Electronic Discovery, Employment, Litigation, Privacy

Emails sent through Yahoo account using work computer protected under attorney-client privilege

The New Jersey supreme court has held that emails an employee sent to her lawyer using her company-issued computer and a personal Yahoo account are protected by the attorney-client privilege.

Stengart v. Loving Care Agency, Inc., — A.2d —, 2010 WL 1189458 (N.J. March 30, 2010)

The New Jersey courts have a reputation of being protective of “informational privacy.” See, e.g., State v. Reid. A recent decision concerning employee privacy in personal emails adds to that reputation.

Plaintiff-employee used a work-issued laptop to access her Yahoo email account, through which she communicated with her lawyer about her lawsuit against the employer. During the discovery phase of that employment discrimination lawsuit, the employer used computer forensics to recover those Yahoo emails that had been copied to the computer’s temporary internet files folder.

Counsel for plaintiff demanded that the employer turn over the recovered emails, arguing that the communications were protected by the attorney-client privilege. When the employer agreed to turn them over but not discontinue use of the information garnered from them, plaintiff sought relief from the court.

The trial court denied relief and plaintiff sought review with the appellate court. That court reversed, and the employer sought review with the state’s supreme court. The supreme court upheld the appellate court’s decision, holding that the employee had a reasonable expectation of privacy in the communications.

The employer relied on a broadly-written company policy through which the employer reserved the right to review and access “all matters on the company’s media systems and services at any time.” But the court rejected those arguments.

Framework for the analysis

The supreme court considered two aspects in its analysis: (1) the adequacy of the notice provided by the company policy, and (2) the important public policy concerns raised by the attorney-client privilege.

As for the adequacy of the notice provided by the policy, the court found that because the policy did not address the use of password-protected personal email accounts, the policy was “not entirely clear.” As for the importance of the attorney-client privilege, the court lavished it with almost-sacred verbal accoutrements, calling it a “venerable privilege . . . enshrined in history and practice.”

“Intrusion upon seclusion” as source for standard

The court noted that the analysis for a reasonable expectation of privacy in dealings between two private parties was a bit different than the analysis in a Fourth Amendment case. The common law source for the standard in this context is with the tort of “intrusion upon seclusion.” Under New Jersey law, that tort is committed when one intentionally intrudes, physically or otherwise, upon the solitude or seclusion of another or his private affairs or concerns, in a manner that would be highly offensive to a reasonable person. (This language comes from the Restatement (Second) of Torts § 652B.)

In this situation, the court found that plaintiff had both a subjective and objective expectation that the messages would be private. Supporting her subjective belief was the fact that she used a private email account that was password protected, instead of her work email account. And she did not store her password on the computer. Her belief was objectively reasonable given the absence of any discussion about private email accounts in the company policy.

Plaintiff’s expectation of privacy was also bolstered by the fact that the email messages were not illegal, nor would they impact the performance of the employer’s computer system. And they bore all the “hallmarks” of attorney-client communications.

For all these reasons, not the least of which the priority of the courts “to keep private the very type of conversations that took place here,” the court found that the conversations were protected by the attorney-client privilege.

March 23, 2010 Litigation

Kentucky Supreme Court: gambling domain names did not have standing

Com. ex rel. Brown v. Interactive Media Entertainment and Gaming Ass’n, Inc., — S.W.3d —, 2010 WL 997104 (Ky. March 18, 2010)

Back in 2008 the Commonwealth of Kentucky took an extraordinary step in its battle against online gambling. It filed an action in state court seeking to take over 141 domain names that the Commonwealth believed were used for illegal gambling sites. The trial court ordered forfeiture of the domain names.

Kentucky

Lawyers arguing against the forfeiture of the domain names sought a “writ of prohibition” from the appellate court, asking that court to prevent the forfeiture of the domain names. The lawyers appearing before the appellate court fell into two categories: those purporting to actually represent certain domain names (not the domain names’ owners) and those representing gambling trade associations whose members purportedly included some of the registrants of the affected domain names.

The appellate court granted the writ of prohibition. The Commonwealth sought review with the state supreme court. The supreme court dismissed the writ because those arguing against it lacked standing.

Who’s interest was at stake?

The court noted that only a party with a “judicially recognized interest” could challenge the forfeiture of the domain names. The court rejected the notion that the domain names could represent themselves:

An internet domain name does not have an interest in itself any more than a piece of land is interested in its own use. Just as with real property, a domain name cannot own itself; it must be owned by a person or legally recognized entity.

As for the gambling associations, the court held that there could be no “associational standing” because none of the associations would identify any of their members. Associational standing is when an organization (say, for example, the NAACP or a labor union) files suit on behalf of its members. One of the fundamental requirements of associational standing a showing that members of the association would have the right to sue in their individual capacities. Since there was no evidence as to whose interests the associations represented, there was no basis to conclude that the associations’ members would have standing to sue in their own right.

So the court sent the matter back down to the appellate court with orders to vacate the writ of prohibition. But the supreme court also hinted that those affected by the forfeiture could get another bite at the apple: “If a party that can properly establish standing comes forward, the writ petition giving rise to these proceedings could be re-filed with the Court of Appeals.” One would think that at least one brave soul will step forward. Some in the industry seem to hope so.

Other accounts of this story:

March 19, 2010 Anonymity

Anonymous sender of beer pong email gets to remain unknown

A.Z. v. Doe, 2010 WL 816647 (N.J. Super. App. Div. March 8, 2010)

What's not to love about beer pong?

Even if you do just a cursory review of cases that deal with online anonymity, you are bound to come across a 2001 New Jersey case called Dendrite v. Doe. That case sets out a four part analysis a court should undertake when a defamation plaintiff seeks an order to unmask an Internet user who posted the offending content anonymously.

Under Dendrite, a court that is asked by a defamation plaintiff to unmask an anonymous speaker must:

  • require the plaintiff to try to notify the unknown Doe speaker that he or she is the subject the unmasking efforts, and give him or her a reasonable opportunity to oppose the application;
  • require the plaintiff to identify and set forth the exact statements purportedly made by each anonymous poster that plaintiff alleges constitutes actionable speech;
  • require the plaintiff to produce sufficient evidence supporting each element of its cause of action, on a prima facie basis; and
  • balance the defendant’s First Amendment right of anonymous free speech against the strength of the prima facie case presented and the necessity for the disclosure.

The state appellate court in New Jersey recently had occasion to revisit the Dendrite analysis in a case called A.Z. v. Doe. It found that a defamation plaintiff was not entitled to learn the identity of a person who anonymously sent an email that had content and attached photos that allegedly defamed plaintiff. The court found that plaintiff failed to meet the third factor in the Dendrite analysis, i.e., failed to present a prima facie case of defamation.

Beer pong is not for honor students

Someone took pictures of plaintiff playing beer pong at a party and posted them on Facebook. That’s all in good fun, except that plaintiff was a minor and belonged to her high school’s “Cool Kids & Heroes” program. Kids get into that program by making good grades and promising to refrain from bad behavior.

A purported “concerned parent” set up a Gmail account (anonymously) and sent an email to the faculty advisor for the Cool Kids & Heroes program. The email had photos attached showing several of the program’s kids doing things they shouldn’t be doing like drinking and smoking pot. In all fairness it should be noted that the picture of plaintiff only showed her playing beer pong — it didn’t actually show her drinking or smoking, though there were cups and beer cans on the table in front of her.

The faculty advisor forwarded the email and images on to school administrators, and the school also notified the police. But law enforcement apparently took no further action.

Plaintiff filed a defamation lawsuit against the anonymous sender of the email and sent a subpoena to Google to find out the IP address from which the message was sent. Google notified plaintiff that it came from an Optimum Online IP address. So plaintiff sent a subpoena to Optimum Online for the identifying information. The ISP notified its customer Doe, and Doe moved to quash the subpoena.

The trial court granted the motion to quash, concluding that plaintiff failed to meet the fourth Dendrite factor (dealing with the First Amendment). Plaintiff sought review with the appellate court, which affirmed but on different grounds.

Why the defamation claim failed

The appellate court agreed that the motion to quash should be granted (that is, that the anonymous sender of the email message should not be identified). But the appellate court’s reasoning differed. It didn’t even need to get to the fourth Dendrite factor, because it held that plaintiff didn’t meet the third factor (didn’t present a prima facie defamation case).

The big problem with plaintiff’s defamation claim came from the requirement that the statement alleged to be defamatory (in this case, that plaintiff had broken the law) needed to be “false.” The court found five reasons why this element had not been met:

  • Plaintiff submitted no evidence (like an affidavit) that she wasn’t drinking the night the photo was taken.
  • Plaintiff submitted no evidence that law enforcement actually concluded to take no further action. Plaintiff argued their lack of action showed she didn’t break the law.
  • Even if there was evidence that law enforcement decided to take no action, that would not have been relevant to the truth of the question of whether plaintiff was drinking. That would only go to show that law enforcement decided not to do anything.
  • The photograph attached to the email showing plaintiff playing beer pong would lead one to conclude that she was in “possession” of the alcohol on the table, and that was a violation of the law.
  • Doe submitted other photos from Facebook in connection with the motion to quash which showed plaintiff actually holding a beer.

So the court never got to the question of the First Amendment and how it related to the anonymous email sender’s right to speak. The court concluded that because plaintiff had not put forth a prima facie case of defamation, the anonymous speaker should stay unknown.

Beer pong photo courtesy Flickr user elisfanclub under this Creative Commons license.

Manganese dendrites in limestone photo courtesy Flickr user Arenamontanus under this Creative Commons license.

March 3, 2010 Uncategorized

Supreme Court clarifies basis for why copyright suits over unregistered works should be dismissed

James Earle Fraser's statue The Contemplation ...
Image via Wikipedia

Supreme Court overturns Second Circuit, holding that a copyright plaintiff’s failure to register the work before filing suit does not deprive the court of subject matter jurisdiction.

Reed Elsevier v. Muchnick, Slip. Op., 559 U.S. ___ (March 2, 2010) [View opinion here]

“Subject matter jurisdiction” refers to a court’s power to hear the matter before it. The Constitution sets out the general contours for the federal courts’ jurisdiction, and Congress enacts statutes that give more detail to this set of powers. Particular statutes can define whether the federal courts have subject matter jurisdiction over certain types of cases. For example, Congress has declared that the federal courts have exclusive jurisdiction over copyright cases (See 28 U.S.C. 1338).

If a court does not have subject matter jurisdiction over the type of matter before it, it has no power to adjudicate the case. So the question of whether subject matter jurisdiction exists is critical.

The Supreme Court just decided a case that deals with the scope of subject matter jurisdiction in copyright cases, and clarifies a notion that has been the subject of some uncertainty. The question the court decided was whether a federal court has subject matter jurisdiction over a copyright case when a work at issue is not the subject of a copyright registration.

Section 411(a) of the Copyright Act (at 17 U.S.C. 411(a)) provides, among other things, that “no civil action for infringement of the copyright in any United States work shall be instituted until . . . registration of the copyright claim has been made in accordance with this title.”

Some courts have held, and many litigants have argued, that this provision of Section 411 is a “jurisdictional prerequisite.” Said another way, some have argued that if the copyright plaintiff files suit without having secured a registration, the court is without subject matter jurisdiction over the case. In the case of Reed Elsevier, Inc. v. Muchnick, however, the Supreme Court held that Section 411 does not deprive the court of subject matter jurisdiction, but instead merely provides a “claim-processing rule,” akin to an element of the case.

The lower court proceedings

A group of freelance writers filed a class action copyright infringement case in federal court in New York. They settled the case and the judge approved the settlement. Some of the plaintiffs objected to the settlement on procedural grounds, and when the court entered final judgment, those objecting plaintiffs appealed to the Second Circuit. On its own motion, the Second Circuit raised the question of whether it had subject matter jurisdiction over the case, as some of the plaintiffs in the class had unregistered works.

The case took on a peculiar procedural aspect — neither side in the dispute argued that the federal court was without subject matter jurisdiction, but the Second Circuit decided anyway that it did not. (After all, subject matter jurisdiction pertains to the power of the court, not the rights of the parties, so parties cannot waive the absence of subject matter jurisdiction.) Concluding that it didn’t have jurisdiction, the Second Circuit reversed the approval of the settlement.

The defendants in the underlying case sought review with the Supreme Court, and the high court took on the case. It reversed the Second Circuit, holding that the court did indeed have jurisdiction, even though some of the plaintiffs’ copyrights at issue were unregistered.

The court’s holding

It is worth noting that this case does not address the bothersome question of whether Section 411 requires that a copyright plaintiff actually have a registration certificate in hand before filing the complaint, or whether he or she simply needs to have the application on file. The case also does not stand for the proposition that one can pursue copyright infringement litigation without having registered his or her copyright. A plaintiff without a registration will still lose, just for different reasons.

Justice Thomas wrote the majority opinion. He began the analysis by noting the court’s recent efforts to curtail “drive-by jurisdictional rulings,” which can “miss the critical differences between true jurisdictional conditions and nonjurisdictional limitations on causes of action.” It was with this eye toward careful analysis that the court looked to the present question.

The court reviewed the general approach it set out in the case of Arbaugh v. Y&H Corp., 546 U.S. 500 (2006) for distinguishing jurisdictional conditions from claim-processing requirements or elements of a claim, stating in part that “when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character.” Said another way, if a statute somehow limits the way a case can be brought before federal court but doesn’t come out and say that it’s a limitation on subject matter jurisdiction, it should not be read as limiting jurisdiction. In this way, the court’s approach is to broaden federal jurisdiction.

In this case, the court found that Section 411(a) did not “clearly state” that the registration requirement is jurisdictional. Moreover, the section of federal law that provides for federal court jurisdiction in general (28 U.S.C. 1331) and federal jurisdiction over copyright claims (28 U.S.C. 1338) says nothing about a requirement that there be a registration before the court has subject matter jurisdiction. Furthermore, Section 411 provides on its face certain exceptions for the registration requirement (e.g., no registration is required for non-United States works). The court observed that “it would be at least unusual to ascribe jurisdictional signifcance to a condition subject to these sorts of exceptions.”

What does it mean?

The case actually addresses a rather nuanced point of copyright law. And the effect of the holding will not change the end results of cases brought in the future with the same facts — after all, a non-registering plaintiff will still lose either way, now just for a different reason. Motions to dismiss copyright complaints alleging infringement of unregistered works will clearly fall under Fed. R. Civ. P. 12(b)(6) (failure to state a claim) and not 12(b)(1) (lack of jurisdiction).

But the question of a federal court’s jurisdiction is of significant import, regardless of how nuanced the question is, or the lack of difference in practical effect. The question of whether a court should dismiss a case because it doesn’t have the power to hear it, as compared to dismissing it because the plaintiff has not jumped through the appropriate hoops, is an important one.

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