Mary Siceloff, Author at Weintraub Tobin

(H.R. 6201) FAMILIES FIRST CORONAVIRUS RESPONSE ACT: What Employers Should Know

Published: March 19, 2020

On March 18, 2020, Congress passed the Families First Coronavirus Response Act (“FFCRA”). The President quickly signed it into law on the same day. The Act provides paid sick time and expands the Family and Medical Leave Act to provide an extended period of unpaid or partially paid leave for qualifying reasons related to the coronavirus [COVID-19] public health emergency. Below is a summary of the portions of the new law relating to employee benefits and employer obligations.Emergency Family and Medical Leave Expansion Act (E-FMLA)Effective Period

This Act will go into effect no later than 15 days after the enactment of the FFCRA (April 2, 2020) and the Act will expire on December 31, 2020.

Eligible Employees

The Act applies to employees who have been employed for at least 30 calendar days by the employer.

Covered Employers

The Act requires all employers with fewer than 500 employees to provide this leave.

Qualifying Reasons for Leave

E-FMLA leave is available under this Act for an employee who is unable to work (or telework) due to a need to care for the employee’s son or daughter who is under 18 years of age if the child’s school or place of care has been closed or the child care provider of the employee’s child is unavailable due to a public health emergency.

Unpaid/Paid Leave

The Act provides for a combination of unpaid and paid leave. The first 10 days of E-FMLA leave may be unpaid leave. However, the employee may elect and an employer may require an employee to substitute any accrued vacation leave, personal leave, or medical or sick leave for unpaid for unpaid leave under the Act. For many employees, this first 10 day period will likely be paid as a result of receipt of paid sick leave under the Emergency Paid Sick Time Act under the FFCRA (discussed below). After the first 10 days, employers shall provide an employee paid leave for each additional day of leave in an amount that is not less than two-thirds of the employee’s regular pay rate for the number of hours the employee would otherwise be normally scheduled to work. For an employee whose schedule hours varies from week to week, the employer shall use the employee’s average number of hours per day over the 6-month period ending on the date the employee takes leave under the Act.
In any case, the paid leave under E-FMLA shall not exceed $200 per day and $10,000 in the aggregate.

Job Restoration

FMLA’s job restoration requirements apply to employers with 25 or more employees. For employers who employ fewer than 25 employees, E-FMLA’s job restoration requirement shall not apply if the following conditions are met:

The employee takes leave under the Act;
The position held by the employee when the leave commenced does not exist due to economic conditions or other changes in operating conditions of the employer caused by a public health emergency during the period of leave;
The employer makes reasonable efforts to restore the employee to a position equivalent to the position the employee held when the leave commenced, with equivalent benefits, pay, and other terms and conditions of employment; and
If the reasonable efforts of the employer to restore the employee to an equivalent position fail, the employer makes reasonable efforts to contact the employee if an equivalent position becomes available in the next year.

Employment under Multi-Employer Bargaining Agreement

An employer who is a signatory to a multiemployer collective bargaining agreement may fulfill its obligations under the E-FMLA by making contributions to a multiemployer fund, plan, or program based on the paid leave each of its employees is entitled to under such section while working under the multiemployer collective bargaining agreement, provided that the fund, plan, or program enables employees to secure pay from such fund, plan, or program based on hours they have worked under the multiemployer collective bargaining agreement for paid leave taken under the Act.

Special Rules and Exemptions

An employer shall not be subject to the E-FMLA if: (1) the employer employs more than 500 employees; or (2) the employer of a health care provider or an emergency responder elects to exclude such employee from the application of the provisions under the Act.

Regulatory Authorities

The Secretary of Labor shall have the authority to issue regulations to (1) exclude certain health care providers and emergency responders from the definition of eligible employee; and (2) to exempt small businesses with fewer than 50 employees from the requirement of the E-FMLA.

Emergency Paid Sick Leave Act (“E-PSLA”)

Effective Period

The E-PSLA will also go into effect no later than 15 days after the enactment of the FFCRA (by April 2, 2020) and will expire on December 31, 2020.

Purposes for Taking Sick Leave

The E-PSLA requires private employers who employ fewer than 500 employees and government employers to provide paid sick time to employees if they are unable to work (or telework) because:

The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19;
The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
The employee is caring for an individual who is subject to a quarantine or isolation order related to COVID-19;
The employee is caring for a son or daughter because the child’s school or place of care has been closed or the child care provider is unavailable due to COVID-19 precautions;
The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Exception: Employers of health care providers or emergency responders may elect not to provide the sick leave under the E-PSLA to those employees.

Reasonable Notice to Employer

After the first workday (or portion thereof) an employee receives paid sick time under the E-PSLA, an employer may require the employee to follow reasonable notice procedures in order to continue receiving such paid sick time.

Amount of Emergency Paid Sick Leave

Full-time employees shall be entitled to 80 hours of paid sick time under the E-PSLA; part-time employees shall be entitled to the number of hours equal to the average number of hours the employee works over a two-week period. For an employee whose schedule varies from week to week, the employer shall use the employee’s average number of hours per day over the 6-month period ending on the date the employee takes leave under the Act.
Paid sick time under the E-PSLA shall be available for immediate use by the employee regardless of how long the employee has been employed by the employer.

No Carryover and Termination of Paid Sick Time

Paid sick time under the E-PSLA does not carryover from one year to the next. Once an employee who received paid sick time under the Act returns to work, the employer is not required to provide the employee any further paid sick time under the Act.

Prohibitions

An employer cannot require, as a condition of providing paid sick time under the E-PSLA, that an employee search for or find a replacement employee to cover the hours during which the employee is using sick time.
An employer cannot require an employee to use other paid leave before the employee uses the paid sick time under the E-PSLA.

Notice to Employees

Employers are required to post and keep posted, in conspicuous places on the premises of the employer where notices to employees are customarily posted, a notice, (which is to be prepared or approved by the Secretary of Labor), of the requirements described in the E-PSLA. The Secretary of Labor shall make a model notice publicly available no later than 7 days after the enactment of the E-PSLA.

Pay During Sick Leave

If an employee takes sick time off for self-care, the employee shall be compensated at whichever is greater of the following:

The employee’s regular pay rate;
The federal minimum wage rate; or
The state or local minimum wage rate in effect for such employee.

If an employee takes sick time off to care for a sick family member or a child who is not in school or child care because of closures or unavailability due to COVID-19, the employee shall be compensated at two-thirds of their regular pay rate.
In any event, the sick leave pay under the E-PSLA shall not exceed $511 per day and $5,110 in the aggregate for a use described in categories 1, 2, and 3 under “Purposes for Taking Sick Leave” above, and shall not exceed $200 per day and $2,000 in the aggregate for a use described in categories 4, 5, and 6 under “Purposes for Taking Sick Leave” above.

Employment Under Multi-Employer Bargaining Agreement

An employer signatory to a multiemployer collective bargaining agreement may fulfill its obligations under the E-PSLA by making contributions to a multiemployer fund, plan, or program based on the hours of paid sick time each of its employees is entitled to under such section while working under the multiemployer collective bargaining agreement, provided that the fund, plan, or program enables employees to secure pay from such fund, plan, or program based on hours they have worked under the multiemployer collective bargaining agreement for paid leave taken under the Act.

Prohibited Acts and Enforcement

The E-PSLA prohibits employers from discharging, disciplining, or discriminating against any employee who takes paid sick leave under the Act, or has filed any complaint or instituted or caused to be instituted any proceeding under or related to the Act, or has testified or is about to testify in any such proceeding. Employers who fail to provide paid sick time under the E-PSLA or who terminate an employee for discriminatory reasons as set forth above will be considered in violation of the Fair Labor Standards Act and subject to the Fair Labor Standard Act’s penalties, including payment of back pay, liquidated damages, and attorneys’ fees.

Tax Credits

The FFCRA provides tax credits for the employer’s portion of payroll taxes for wages paid to employees taking either paid sick leave under the E-PSLA or FMLA leave under the E-FMLA. Employers should further review the FFCRA regarding such tax credits and work with their CPA and/or tax attorney regarding such credits.

Regulatory Authorities

The Secretary of Labor shall have the authority to: (1) exclude certain health care providers and emergency responders from the definition of employee under the Act, including by allowing the employer of such health care providers and emergency responders to opt out; and (2) to exempt small businesses with fewer than 50 employees.

The Labor and Employment attorneys at Weintraub Tobin remain available to assist employers in their employment law compliance throughout these very difficult and uncertain times, including helping them navigate and comply with the new requirements under the FFCRA. Feel free to reach out to any of them for assistance. Also, the Secretary of Labor has the authority to establish guidelines under the E-FMLA and the E-PSLA. We are closely monitoring the Secretary of Labor’s actions and will provide guidance as any updates occur.

Stay Away; No Trademark for Social Distancing and Other Informational Terms

Published: March 19, 2020

by Scott M. Hervey
The IP Law Blog

Call me a pessimist, but it was surprising to me when I recently checked the USPTO trademark database that I did not find an application to register “Social Distancing” for some other novelty item. (It is also surprising that the tag #socialdistancing has only 159,000 uses on Instagram.) Nevertheless, I am sure some entrepreneurs will use it on a t-shirt or coffee mug, file a trademark application for “Social Distancing” and then try to prohibit others from using the term. Chances are, however, that this entrepreneur will not be successful.

The trademark examiner assigned to an application to register SOCIAL DISTANCING will likely refuse registration because it fails to function as a trademark because it merely conveys an informational message. Where a term is merely informational, the context of its use in the marketplace would cause consumers to perceive the term as merely conveying an informational message, and not a means to identify and distinguish goods/services from those of others.

A “trademark” is a word, name, symbol, or device, or any combination thereof used by a manufacturer or merchant to identify their goods and distinguish them from goods manufactured or sold by others, and to indicate the source of manufacturer’s or merchant’s goods. Determining whether a term or slogan functions as a trademark depends on how it would be perceived by the relevant public.

Under trademark law, “widely used messages” fail to function as a trademark. A “widely used message would include slogans, terms, and phrases used by various parties to convey ordinary or familiar concepts or sentiments, as well as social, political, religious, or similar informational messages that are in common use or are otherwise generally understood. The more a term or phrase is commonly used in everyday speech, the less likely consumers will perceive the term as a trademark.

Some examples of proposed marks that have been denied registration on the grounds of being merely information or a widely used message are: ITS TACO TUESDAY for clothing, I LOVE YOU for jewelry, BLACK LIVES MATTER for a wide variety of goods and services, THINK GREEN for products advertised to be recyclable and to promote energy conservation, and DRIVE SAFELY for automobiles.

The trademark examiner would contend that the proposed mark, SOCIAL DISTANCING, merely conveys an expression of support for the ideas embodied in the message, that maintaining a certain distance between individuals is a measure people can take to slow the rapid spread of the coronavirus, as opposed to rather than an indicator of a single source of goods or services. In support of the refusal to register, the trademark examiner would introduce evidence from the CDC and other sources discussing the benefits of social distancing in slowing down the spread of coronavirus.

So feel free to use #socialdistancing on your favorite social media platform to highlight your contribution as a thoughtful and considerate member of society as we deal with these most interesting times.

San Francisco Paid Sick Leave Expanded Due to COVID-19

Published: March 18, 2020

by Shauna N. Correia
The Labor & Employment Law Blog

Yesterday, San Francisco Mayor London N. Breed announced a “Workers and Families First Program” to offer additional paid sick leave benefits to employees who have been impacted by the COVID-19 pandemic. It will apply to San Francisco private sector workers, and if fully utilized, it could provide coverage for up to 25,000 San Francisco workers. Fortunately for already-struggling businesses, the Program is not compulsory. In addition, the Program will set aside $10 million in public funding to help offset the burden on who have to provide an additional five days of sick leave pay to workers, beyond their existing policies under SFPLO and state law.

According to the Mayor’s press release, “The Workers and Families First Program will provide City financial assistance to businesses and nonprofits to provide additional paid sick leave time to employees, over and above their existing policies. All San Francisco businesses will be eligible, with up to 20% of funds reserved for small businesses with 50 or fewer employees. The City will contribute up to one week (40 hours) at $15.59 per hour (minimum wage) per employee, or $623 per employee. The employer will pay the difference between the minimum wage and an employee’s full hourly wage.”

Employers Beware! Settling Individual Employee Claims Will Not Bar His or Her PAGA Claims

Published: March 16, 2020

by James Kachmar
The Labor & Employment Law Blog

On March 12, 2020, in the case Kim v. Reins International California, Inc., the California Supreme Court addressed the issue: “Do employees lose standing to pursue a claim under the Labor Code Private Attorneys General Act (“PAGA”) … if they settle and dismiss their individual claims for Labor Code violations?” Unfortunately, for employers in California, the California Supreme Court held that an employee could continue to pursue PAGA claims against their employers, even if they have settled and dismissed their individual claims, for Labor Code violations against that employer.

Reins operates a number of restaurants in California, and employed the plaintiff, Justin Kim, as a “training manager.” Reins had classified its training managers as an exempt position. Kim sued Reins in a putative class action claiming that he and other training managers had been misclassified. His complaint brought individual claims, class action claims, and also sought civil remedies under PAGA as a result of the alleged misclassification.

Reins moved to enforce an arbitration agreement it had with Kim, dismiss the class action claims and stay the PAGA claim until the arbitration was complete (Reins acknowledged that it could not force arbitration of the PAGA claim). The Court granted Reins’ motion. It dismissed the class action claims and ordered arbitration of the individual claims while staying the PAGA claim pending the outcome of the arbitration. During the arbitration, Kim accepted a settlement offer from Reins and dismissed his individual claims as a result. This resulted in the stay of the PAGA claim being lifted. Reins moved for summary adjudication on the ground that Kim no longer had standing to pursue a PAGA claim given that he had settled and dismissed his individual claims. The trial court agreed with Reins and granted its motion, finding that Kim, by settling his individual claims, was no longer an “aggrieved employee” under PAGA.

The issue of standing acts as kind of a “gate keeper” to the court system, ensuring that courts are only deciding actual controversies between the parties. In order to determine whether Kim had standing to pursue the PAGA claim despite his dismissal of his individual claims, the California Supreme Court looked to the language of the PAGA statute, noting that its job was “to ascertain the intent of the legislature so as to effectuate the purpose of the [PAGA statute].” In looking at the plain language of PAGA as it relates to standing, a plaintiff has to establish two requirements: (1) he or she is someone “who was employed by the alleged violator;” and (2) he or she is someone “against whom one or more of the alleged violations [of the Labor Code] was committed.” The California Supreme Court held that in applying this plain language, both requirements could be readily ascertained. Kim was both employed by Reins and that he had alleged “that he personally suffered at least one Labor Code violation on which the PAGA claim was based.”

Reins argued that although this may have meant that Kim had standing under PAGA at the time he brought his claim, he “lost” standing when he settled and dismissed his individual claim. In particular, Reins argued that once Kim’s “injury” had been settled and thereby “redressed,” it was no longer a “continuing injury” that needed to be addressed under PAGA. The California Supreme Court rejected this argument.

First, the California Supreme Court held that the language of standing under PAGA focuses on the alleged violations, not the alleged injury. In essence, to adopt Reins’ argument, the California Supreme Court felt that it would be inserting “expiration” language into the statute, which it did not feel that it could do under the separation of powers theory. It concluded that the Legislature could have included such language when it enacted PAGA but apparently decided not to. Thus, in interpreting the PAGA standing requirement, the California Supreme Court held, “employees who were subjected to at least one unlawful practice have standing to serve as PAGA representatives, even if they did not personally experience each and every violation.”

Furthermore, under PAGA, a prospective plaintiff must first notify his or her employer and the Labor and Workforce Development Agency of the alleged violations and supporting facts and theories. The LWDA then has 65 days in which to investigate, issue a citation, or otherwise respond to the employee’s notice. If the LWDA fails to do one of these things within that time period, the employee may then bring a PAGA claim. The California Supreme Court concluded that the statutory purpose of PAGA was to allow private individuals, such as Kim, to seek to enforce PAGA as a means of augmenting “the limited enforcement capability of the [LWDA].” Thus, the Court noted that focusing on the PAGA plaintiff individual’s claims shifts focus from the proper role of the plaintiff who is instead “acting on behalf of the government.”

Likewise, although a representative of a class action can lose his or her ability to represent the class if he or she settles and dismisses her individual claims, the Court concluded that PAGA is not analogous to a class action. Rather, the California Supreme Court concluded, “Every PAGA action … is a representative action on behalf of the State” and not on a particular class.

The California Supreme Court also reasoned that allowing an employer to avoid PAGA penalties by settling a representative’s individual claims would frustrate the State’s ability to collect and distribute civil penalties that are supposed to be collected in connection with PAGA claims. The California Supreme Court was concerned that the State’s ability to recover future PAGA monies “would be diminished” and that “employers could potentially avoid paying any penalties to the state simply by settling with the individual employees.”

California employers need to be aware of the significance of the California Supreme Court’s Kim decision, especially in strategizing how to address alleged Labor Code violations brought by a single employee. Employers may now be forced to focus more on litigating the PAGA claims rather than trying to avoid those claims by seeking to settle and/or dismiss a representative employee’s individual claims.

Weintraub Tobin Coronavirus Update

Published: March 16, 2020

Like other businesses and governmental agencies, Weintraub Tobin continues to follow the rapidly changing news regarding the impact of the coronavirus (COVID-19) pandemic. Our fundamental goal is to take reasonable steps to help protect the health and safety of our employees, attorneys, clients, and community partners. In doing so, we are following the recommendations of the CDC and other public health agencies and are putting in place certain protocols to prevent, and respond to, the virus.

We are also committed to continuing to provide exceptional legal services to the clients we serve and will do our best to minimize any interruptions or delays in those services. In order to minimize in-person contact, many attorneys and staff will be working remotely. Attorneys shall remain readily available to communicate with clients both via telephone and email.

Weintraub Tobin appreciates our clients. They are the reason we exist and we are proud to serve them. If you have any questions about your legal needs during this very unsettling and uncertain time, please contact the Weintraub Tobin attorney you regularly work with. You may also contact Managing Shareholder Gary Bradus at (916) 558-6012. In the meantime, we will continue to monitor developments from public health agencies and, if appropriate, update this notice.

We wish you and your loved ones the best. Stay informed, stay healthy, and stay kind.

COVID-19 Resources from Weintraub Tobin:

COVID-19: Resources for Employers (Updated 4-3-2020)

3rd UPDATE: DOL Again Updates Questions & Answers Page for FFCRA (4-3-2020)

DOL’s Informational Webinar re FFCRA Compliance Goes Live (4-3-2020)

The IRS FAQs Provide Guidance on Employee Documentation/Information to Support FFCRA Leave (4-2-2020)

DOL Announces Temporary Rules for FFCRA Implementation; Informational Webinar to be Released on April 3, 2020 (4-01-2020)

2nd UPDATE: DOL Again Updates Question & Answers Page for Families First Coronavirus Response Act (3-30-2020)

Small Business Provisions of CARES Act (3-28-20)

Coronavirus Aid, Relief, and Economic Security (CARES) Act: Expansion of Unemployment Benefits Through the Pandemic Unemployment Assistance Program (3-27-2020)

DOL Updates Questions & Answers Page for Families First Coronavirus Response Act (3-27-2020)

San Francisco Issues New Guidance on San Francisco Paid Sick Leave During Pandemic; Financial Relief for San Francisco Employers (3-26-2020)

DOL Issues Model Notice to Employees of Rights Under Families First Coronavirus Response Act (3-25-20)

Federal Stimulus in Response to COVID-19 (3-25-2020)

Families First Coronavirus Response Act Takes Effect April 1, 2020 (3-25-2020)

More On The FFCRA: Payroll Tax Credits And Period Of Non-Enforcement (3-24-2020)

Business and Tax Relief in Response to COVID-19 (3-24-2020)

Commercial Eviction Moratoriums in California and Other Real Estate Issues Arising From the COVID-19 Pandemic (3-23-2020)

IRS to Provide Tax Relief to Some Employers in Light of Families First Coronavirus Response Act (3-22-20)

Governor’s Newsom’s Statewide Order is in Place So Now, How Do Businesses Identify Essential Critical Infrastructure Workers? (3-21-20)

California Governor Newsom Issues State-Wide Stay at Home Order (3-20-20)

(H.R. 6201) Families First Coronavirus Response Act: What Employers Should Know (3-19-20)

Stay Away; No Trademark for Social Distancing and Other Informational Terms (3-19-2020)

San Francisco Paid Sick Leave Expanded Due to COVID-19 (3-17-20)

Lizbeth “Beth” West Interviewed in the Southern California Recorder Regarding AB 5

Published: March 12, 2020

Lizbeth (Beth) West was recently interviewed about the impact of California Assembly Bill (AB) 5 on California businesses and workers. AB 5 went into effect on January 1, 2020 and has caused many companies, in many industries, to scramble to determine how, and if, they will change their business model to comply with the new law. As Beth stated in the article, “the focus of this legislation was likely centered on today’s gig economy, but the result seems to have spread the net wider.”

Find out more by reading the complete article here.

District Court Stays Discovery Deadlines Because of Coronavirus Threat but Keeps Markman Hearing on Calendar

Published: March 12, 2020

by Eric Caligiuri
The IP Law Blog

On March 6, 2020, a Central District Court in UPL NA Inc. f/k/a United Phosphorous, Inc. v. Tide International (USA), Inc. et al, 8-19-cv-01201 (CDCA 2020-03-06, Order) (Ronald S.W. Lew), issued an order that may become more common place across courts. At the request of the parties, the Court issued a temporary stay of all discovery in the action because of the threat posed by the Coronavirus.

Specifically, the Court noted that the parties had jointly stipulated that “discovery efforts are being significantly impacted by the outbreak of coronavirus. Both parties have sought materials and testimony from witnesses who are located outside of the United States, including in China, and given current travel restrictions and quarantine rules, obtaining the discovery sought at this time is impractical, if not impossible.” Therefore, the Court found good cause to temporarily vacate the discovery dates presented in the parties’ joint request.

YouTube and the First Amendment

Published: March 6, 2020

by James Kachmar
The IP Law Blog

Is the privately-owned YouTube site really a “state actor” subject to judicial scrutiny under the First Amendment? That’s the claim made in a lawsuit by Prager University, which is not really a university. The Ninth Circuit was recently called upon to address PragerU’s claim that the widely popular internet site operated by a private entity should be treated as a “state actor” subject to the First Amendment. Unsurprisingly, the Ninth Circuit reaffirmed well-established case authority to hold that the First Amendment’s protections apply only as to protect against governmental action, not to private companies such as YouTube.

PragerU claims that its mission is purportedly “to ‘provide conservative view points and perspective on public issues that it believes are often overlooked.’” PragerU creates videos that target younger audiences and has posted hundreds of videos on YouTube.

Unless you’ve been living in a cave, you likely have visited YouTube, which is owned by Google LLC. YouTube allows users to post user-generated videos and has approximately 1.3 billion users. More than 400 hours of video are uploaded to the site every hour of every day and more than 500 million hours of those videos are watched by YouTubers each day. YouTube invites the public to post video to its platform and states that it is “committed to fostering a community where everyone’s voice can be heard.” However, the posting of content by users is subject to YouTube’s terms of service and community guidelines, which include the right of YouTube to remove or restrict content that is posted to its platform.

One way that YouTube does this is through its “restricted mode” which allows users to activate this tool to make certain age-inappropriate content unavailable for that user. Only about 2% of the users of YouTube utilize the restricted mode. The restricted mode is intended to identify potentially mature content, which is tagged either by an automated algorithm or manually by a user. Once a particular video is tagged, YouTube will inform the content creator who can then appeal the classification, which is reviewed by a YouTube representative.

YouTube tagged a number of PragerU’s videos for restricted mode and “demonetized” some of their videos, which meant that third parties could no longer advertise on those videos. PragerU appealed these designations but certain of the videos remained restricted and/or demonetized. As a result, PragerU sued YouTube (and its parent company, Google) alleging violation of the First Amendment and false advertising under the Lanham Act. PragerU moved for preliminary injunction, which was denied. The district court then granted YouTube’s motion to dismiss with leave to amend. Rather than amend its complaint, PragerU appealed the dismissal to the Ninth Circuit.

The Ninth Circuit first analyzed PragerU’s First Amendment claim by noting that it faced “a formidable threshold hurdle: YouTube is a private entity.” The Ninth Circuit noted that the First Amendment’s Free Speech Clause only prohibits the government – and not a private party such as YouTube – from abridging speech. Even PragerU admitted that YouTube was a private entity that was able to operate its platform without any state involvement.

PragerU tried to argue, however, that a private entity becomes a state actor when it operates its private property in a manner that it becomes “a public forum for speech.” The Ninth Circuit noted that this position had long been rejected. For instance, nearly 50 years ago in the case, Lloyd Corporation v. Tanner, the U.S. Supreme Court held that “private property does not `lose its private character merely because the public is generally invited to use it for designated purposes’.” That is, although YouTube is practically a “public square on the internet,” that does not mean that it is transformed into a state actor as a result.

Likewise, in 2000 the Ninth Circuit in Howard v. America Online, and a number of other circuit court decisions since then, have uniformly held that “digital internet platforms that open their property to user generated content do not become state actors” for purposes of the First Amendment. Faced with this wealth of authority, PragerU tried to argue that YouTube was a state actor “because it performs a public function.” The Ninth Circuit noted, however, that a private entity could only be deemed a state actor “when it conducts a public function” that “must be both traditionally and exclusively governmental.” This is a difficult standard to meet. The Ninth Circuit continued that YouTube hosted speech on a private platform and this was hardly “an activity that only government entities have traditionally performed.” The Court noted that historically, private parties such as grocery stores and comedy clubs have opened up their private property for speech without transforming themselves into state actors. The Court noted that to adopt PragerU’s position would subject “every retail and service establishment in the country” to constitutional norms.

PragerU then argued that because YouTube was so popular, it should be bound by the First Amendment like a governmental agency. The Court rejected this claim, too. PragerU argued that the 1946 U.S. Supreme Court case, Marsh v. Alabama, supported its position but ignored that in Marsh, the defendant was a private entity that operate a “company town” and performed “the full spectrum of municipal powers.” The Ninth Circuit recognized that YouTube was not the same as the operator of that company town and concluded that YouTube “operates a platform for user generated content. It does not `perform all the necessary municipal functions’.”

Seeking to salvage its claim, PragerU argued that a private entity could be converted into a public form “if its property is opened up for public discourse.” The Ninth Circuit recognized that there was no legal authority to support this claim, noting that YouTube was not owned, leased or otherwise controlled by the government.

Finally, PragerU argued that because one of YouTube’s representatives stated for a congressional committee that she considers YouTube “to be a neutral public forum,” this was should convert YouTube into a state actor. The Ninth Circuit disagreed and concluded “whether a property is a public forum is not a matter of election by a private entity.” In sum, the Ninth Circuit held that the district court properly dismissed PragerU’s First Amendment claim.

The Ninth Circuit then turned to PragerU’s Lanham Act false advertising claim. The Court concluded that because none of the alleged statements made by YouTube are actionable under the Lanham Act, it would affirm the district court’s dismissal of the claim.

First, the Ninth Circuit held that the statements that YouTube makes concerning its moderation policies do not constitute “commercial advertising or promotion,” which is one of the elements of a Lanham Act violation. Rather, YouTube’s statements about its restricted mode “were made to explain a user tool, not for a promotional purposes to `penetrate the relevant market’ of the viewing public.” The Court continued that not all commercial speech is promotional and that PragerU failed to overcome the commonsense conclusion that the restricted mode guidelines are not advertisements or part of any promotional campaign.

Likewise, the Court rejected PragerU’s argument that the designation of certain of its videos for restricted mode amounted to a misrepresentation about those videos. The Court concluded that the fact that they were tagged “does not imply any specific representation about those videos.” Given that a false advertising claim could be based on implied statements, it was required that the “statement must be both specific and communicated as to `deceive a significant portion of the recipients’.” The Court concluded that the statement that a particular video is “unavailable with restricted mode enabled” did not have any tendency “to mislead, confuse or deceive” the public. Thus, the Ninth Circuit held that the district court properly dismissed PragerU’s Lanham Act claim.

The Ninth Circuit’s decision in the PragerU cases reaffirms the long-held principle that private entities, unlike government agencies, are not subject to judicial scrutiny under the First Amendment. Legal challenges seeking to force internet companies to supposedly allow for more voices are likely to face similar outcomes as the PragerU claims.

Sherry S. Bragg Named Attorney of the Year by the Veteran’s Legal Institute

Published: March 6, 2020

NEWPORT BEACH, CA (March 5, 2020) – Weintraub Tobin, a leading California full-service law firm, is pleased to announce that Sherry S. Bragg has been named “Attorney of the Year” by the Veterans Legal Institute (VLI). Honorees of this award are advocates for veterans and have made significant contributions to veterans’ causes. She will be honored at the Lawyers for Warriors 2020 event in Costa Mesa in September 2020.

Sherry is a board member of VLI and also provides pro bono services to veterans in Orange County. In 2019, she notably represented a 79-year old Navy veteran and his wife who had been denied assistance by their homeowner’s association after a tree destroyed their home.

“Sherry’s outstanding career as a litigator is paralleled by her high level of dedication to her community, and specifically veterans,” said Weintraub Managing Shareholder Gary Bradus. “Our Firm is proud of her service and celebrates this honor.”

Sherry is a shareholder in the Firm’s Litigation group, where she has represented plaintiffs and defendants in complex business disputes in both state and federal courts and in administrative proceedings since 1987. Sherry has tried, co-tried, and arbitrated a significant number of high-value cases to conclusion, and has successfully orchestrated the settlement of many others. In addition, Sherry has an active appellate practice and has briefed and won numerous appeals. She was also recently named to Southern California Super Lawyers® 2020 List.

Google’s Servers Do Not Constitute a Regular and Established Place of Business for Patent Venue

Published: February 27, 2020

by Jo Dale Carothers, Ph.D.
The IP Law Blog

It has become commonplace for companies such as Google to use local servers to provide faster service to customers. This practice has raised the question as to whether those local servers constitute “a regular and established place of business” for the purposes of establishing venue in patent infringement suits in the districts where the servers are located.

Specifically, the patent venue statute, 28 U.S.C. § 1400(b), limits the districts where patent infringement cases can be filed to either (1) where the defendant resides, which for a corporation is where it is incorporated, or (2) where the defendant has a regular and established place of business and has committed acts of infringement.

In Super Interconnect Technologies, LLC v. Google LLC, Super Interconnect sued Google for patent infringement in the Eastern District of Texas. Google filed a motion to dismiss or transfer for improper venue. Prong (1) of the patent venue statute does not apply because Google is not incorporated in Texas, and Google argued Prong (2) is not satisfied because Google does not have “a regular and established place of business” in the district. At the time the complaint was filed, Google did have Global Cache servers in the district for local data caching. These servers were hosted and operated by local internet service providers (“ISPs”) rather than by Google. The District Court ruled that the servers, along with the alleged acts of infringement, satisfied the second prong of the venue statute and thus denied Google’s motion to dismiss.

In a prior case, the Eastern District had similarly found Google’s servers in the district to be sufficient to establish venue. The Federal Circuit denied Google’s petition for a writ of mandamus in this prior case. However, in dissent, Judge Reyna warned the “majority fails to recognize the far-reaching implications” of its decision.

In Super Interconnect, Google again petitioned for a writ of mandamus. In considering the petition, the Federal Circuit noted its previous denial was based on the observation that it was not known at the time if the district court’s ruling involved the type of broad and fundamental legal questions appropriate for mandamus, and there was a lack of disagreement among district courts. However, since that decision, Judge Reyna’s prior concern proved accurate and inconsistencies arose in the district courts’ decisions.

As a result, the Federal Circuit considered whether Google had a regular and established place of business in the district. In In re Cray, Inc., the Federal Circuit previously ruled that “’a regular and established place of business’ under the venue statute must be: (1) ‘a physical place in the district’; (2) ‘regular and established’; and (3) ‘the place of the defendant.’”

First, the Court determined that a physical place in the district does not necessarily need to be owned or leased by the defendant, but instead “merely needs to be a ‘physical, geographical location in the district from which the business of the defendant is carried out.” Here the servers are physically located in the district in “a fixed, geographic location” and thus were found to satisfy the first prong in In re Cray.

Next the Court considered whether the servers are a “place of business.” The Court determined a “‘place of business’ generally requires an employee or other agent of the defendant conducting the business at that place.” As the Court stated, this “is apparent from the service statute for patent cases, now codified at 28 U.S.C. § 1694,” which is intricately linked with the patent venue statute. The service statute points out that if a “suit is brought in a district of which the defendant is not an inhabitant, but in which such defendant has a regular and established place of business, service upon a defendant may be made by service upon the agent or agents engaged in conducting such business.” The Court stated that “[t]he service statute plainly assumes that the defendant will have a ‘regular and established place of business’ within the meaning of the venue statute only if the defendant also has an ‘agent … engaged in conducting such business.’” Therefore, the Court concluded that “a ‘regular and established place of business’ requires the regular, physical presence of an employee or other agent of the defendant conducting the defendant’s business at the alleged ‘place of business.’”

The Court then addressed the question of “whether Google had an employee or agent with a regular, physical presence at its ‘place of business’ and whether that employee or agent was conducting Google’s business.” Google did not have any employees in the Eastern District of Texas, but Super Interconnect argued that the ISPs were Google’s agents. The ISPs, however, were only obligated to perform on-site installation and maintenance of the servers within their datacenters and to provide network access. The Federal Circuit found these activities are “meaningfully different from” and “only ancillary to” “the actual producing, storing, and furnishing to customers of what [Google’s] business offers.” Therefore, the Court concluded that “the Eastern District of Texas was not a proper venue because Google lacked a ‘regular and established place of business’ within the district since it has no employee or agent regularly conducting its business at its alleged ‘place of business’ within the district.” Therefore, the Federal Circuit ordered District Judge Gilstrap to dismiss or transfer the case.

The Court noted, however, that it was not addressing whether “a ‘regular and established place of business’ will always require a human agent, that is, whether a machine could be an ‘agent.’”

Joining and concurring, Judge Wallach also noted that “[g]iven the absence from the record of information sufficient to understand Google’s business model, the question remains for the District Courts to determine whether Google’s end users become agents of Google in furtherance of its business by virtue of voluntarily or involuntarily sharing information generated on Google’s servers. If, for example, by entering searches and selecting results a Google consumer is continuously providing data which Google monetizes as the core aspect of its business model, it may be that … Google is indeed doing business at the computer of each of its users/customers.” We will likely see plaintiffs using Judge Wallach’s concurrence as a basis for venue arguments in upcoming matters.

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