Is There Really Only Room For One “Bay” On The Internet?

Has eBay become so powerful that it can successfully claim to be the only “Bay” on the Internet? That’s what it argued in a recent Ninth Circuit Court of Appeals trademark infringement case. In that case, Perfumebay.com, Inc. v. eBay, Inc., – – – F.3d – – – (9th Cir. November 5, 2007), the court upheld a federal district court decision from the Central District of California which ruled that the term “PerfumeBay” and “perfumebay.com” infringed the mark of Internet giant eBay.

When reviewing possible trademark infringement, courts analyze factors which have become known as the Sleekcraft factors. These factors include (1) strength of the mark, (2) proximity or relatedness of the goods, (3) the similarity of the marks, (4) evidence of actual confusion, (5) the marketing channels used, (6) the degree of care customers are likely to exercise in purchasing the goods, (7) the defendant’s intent in selecting the mark, and (8) the likelihood of expanding into other markets. Where the use of the mark is primarily on the Internet, however, the three key factors are the similarity of the marks, the relatedness of the goods and services, and the parties’ simultaneous use of the Internet as a marketing channel.

The court found that the marks were similar because Perfumebay includes the term eBay in its entirety, and found infringement because both used the Internet simultaneously and both sites sold perfume. The similarity of the marks was more pronounced when Perfumebay’s mark was used as “PerfumeBay.” Significantly, even when Perfumebay used separate words for advertising, Perfume Bay, the domain name www.perfumebay.com still contained eBay’s mark in its entirety because domain names cannot have spaces. Even though Perfumebay typically used a stylized starfish between “Perfume” and “Bay” in its logo, that did not help in the similarity analysis. And while the marks are pronounced differently, have different meanings, and Perfumebay uses a dissimilar look in its logo, the court stated that the way the marks are utilized in the marketplace is determinative. “Internet users do not utilize verbal communication as a basis for the services that they seek. The likelihood of confusion, therefore, does not arise in a vacuum, but rather from the manner in which ‘perfumebay’ is used on the internet.”

Perfumebay’s founder testified that she “envisioned a bay filled with ships importing perfumes from all parts of the world and this bay would be the place where perfume lovers could go to locate the selection of fragrances.” In the court’s view, however, the fact “that the term may convey different impressions to different individuals is irrelevant to a likelihood of confusion analysis.” Again, the court fell back to the fact that the mark “eBay” was found in its entirety within “perfumebay.”

eBay could not convince the court that it should be the only “Bay” on the Internet, however. It was only successful in persuading the court that it is the only permissible “eBay” on the Net. eBay’s Vice President for Litigation was “concerned about any use of bay which is likely to lead consumers into thinking that the web site is sponsored, affiliated, endorsed by [eBay], or one where they’re basically frontally assaulting the brand by treating bay as a generic reference to online commerce. He was also concerned that the use of a generic word plus ‘bay’ would lessen the distinctiveness of eBay’s trademark.” The court didn’t go that far, thankfully, and enjoined only the use of “perfumebay” as a single word. Thus, use of the term “Bay” without the “e” was permitted.

However, that still would seem to prohibit any use of a domain name with the letters “ebay” in them. For example, www.littlebay.com advertises vacation rentals in the Florida Keys. Under Perfumebay.com, eBay could challenge Little Bay’s website as infringing its mark. After all, the domain name contains the mark “ebay” in its entirety, they both advertise on the Internet, and eBay also sells travel packages for Florida vacations. The site www.bluebay.com is another example. BlueBay also sells travel packages, advertises on the Internet, and the domain name contains the conjoined letters “ebay” in their entirety.

A significant factor in the court’s analysis was the strength of the eBay mark. Even though use of the generic term “Bay” without the familiar “e” was at least implied to be infringing, the court refrained from enjoining its use. The Ninth Circuit seemed clear that it would have upheld that injunction also, stating that “the district court did not clearly err in declining to enjoin” such use.

Perfumebay has vowed to continue fighting this decision, and it has filed for an emergency stay of the injunction. It has also indicated that it plans to seek review by the U.S. Supreme Court. Perhaps the Supreme Court will grant review and provide further guidance on trademark infringement in the use of domain names. Until then, there is only one authorized “eBay” on the web, and Little Bay, Blue Bay, and anyone else who uses the conjoined letters “ebay” in a domain name have reason to be nervous.

Contractual Arbitration: Is It Binding On Victims Of Elder Abuse?

California Trusts and Estates Quarterly
Volume 13, Issue 3
Fall, 2007
I. INTRODUCTION

These days, it is virtually impossible to open a bank or brokerage account, or even be admitted to a nursing home, without unwittingly agreeing to resolve any future disputes with the company through binding arbitration. Arbitration clauses are standard in many industries, and once accepted on an industry­-wide basis they become unavoidable and non-negotiable: one either agrees to arbitrate disputes or foregoes the desired or needed services.

Each of us is affected by arbitration agreements in virtually every facet of our lives, but the elderly are particularly impacted by such agreements. Whether contracting for long-term care, seeking care from a hospital, or entrusting their retirement assets to the management of a financial advisor, the elderly are asked to sign binding arbitration agreements which, unbeknownst to them, usually take away rights guaranteed to the elderly by law. Since 1992, the California Legislature has enacted a series of laws specifically designed to protect seniors who are victims of elder financial abuse. Yet arbitration provisions wipe away these rights with merely a signature.

In a ruling by the Sacramento County Superior Court, however, the plaintiff in an elder-financial-abuse case successfully defeated the defendant financial institution’s arbitration provisions, thereby allowing the plaintiff to avail herself of rights and remedies that her contract with the financial institution had specifically limited. This ruling provides a blueprint for all elders who are victims of abuse—whether it be financial abuse, physical abuse, or neglect—to have their lawsuits resolved in a public forum, before a sympathetic jury, with all the rights and remedies the law provides. Shortly after this ruling was issued, the California Court of Appeal, First District, held that enforcing arbitration clauses against abused seniors violated California public policy.1

After briefly discussing how arbitration became the favored means of resolving consumer disputes, this article analyzes arbitration in the context of elder-abuse cases and reflects on the courts’ evolving scrutiny of arbitration clauses as they apply to seniors and their successor representatives.

II. PERCEIVED BENEFITS OF ARBITRATION

A. Historical Overview: The Evolution of Arbitration

In 1925, Congress enacted the Federal Arbitration Act (FAA.).2 The statute dictates that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or equity for the revocation of any contract.” The statute was passed by Congress because state courts were failing to enforce arbitration agreements. California, showing its support for arbitration, enacted a parallel statute two years later.3

Why would a party seek to resolve disputes in arbitration instead of in court? The answer varies from dispute to dispute, but foremost, parties perceive arbitration as faster and more cost-effective than court proceedings. They also perceive arbitration as providing parties with more control over the dispute resolution process. For example, in arbitration, parties sometimes may pick their judge and determine when their claims will be heard.

Courts construing the FAA have opined that it established a “manifest liberal federal policy favoring arbitration agreements.”4 Arbitration, however, is not a panacea, particularly where the rights of a disadvantaged class such as seniors are concerned.

B. Prevailing Realities: A Closer Look at the Impact of Arbitration

In a commercial context, the perceived benefits of arbitration may be actual benefits, but if a dispute is between a company and an individual, particularly an elderly individual, arbitration may have devastating effects. For example, a recent New York Times article, When Winning Feels a Lot like Losing,5 tracked the case of an elderly woman whose life savings had been squandered by her stock broker. The brokerage firm lost nearly $300,000 of the victim’s investments, but the arbitrator awarded the victim only $5,000 in compensatory damages. Adding insult to injury, the arbitration costs were $10,000. The victim, bound by an arbitration clause, recovered a fraction of her losses from Morgan Stanley and was ordered to pay more than twice the amount of her judgment in arbitration costs and fees, rendering the outcome a net loss despite her “victory” at arbitration.

This case highlights what consumer advocates have been saying for years: despite its perceived advantages, there are circumstances in which arbitration results in an injustice. Consumer-rights advocates have been challenging arbitration clauses not only in the elder-abuse context, but also in cases against retail giants such as Gateway. In El Dorado County, a resident has been trying to avoid arbitrating a case against the manufacturer of his computer, which he claims sold him a defective product. Arbitration would cost more than the computer at issue in the case. The aggrieved party has asked the small claims court to allow his dispute to proceed and to deny the company’s motion to compel arbitration.6

The economic burden of arbitration is not the only problem consumers face. In arbitration proceedings, discovery is limited, there is no right to a jury trial, all decisions are final and cannot be appealed. Also, damages are limited, so plaintiffs cannot get punitive damages, attorney’s fees or, in those cases where they otherwise would be available, treble damages. The awarding of attorney’s fees, as well as special damages, is particularly important in elder abuse cases. Often, elderly victims of financial abuse are left nearly penniless. If prohibited from seeking an award of attorney’s fees or special damages, attorneys have little incentive to represent such victims. Finally, arbitration is a private proceeding and, although some see this as beneficial, this denies plaintiffs the important public validation that many seek. This aspect of arbitration also keeps from the public’s view the rampant problem of elder abuse.

III. EVOLUTION OF PROTECTIVE LEGISLATION FOR SENIORS

In 1991, the California Legislature passed Senate Bill 679, which added certain provisions to the Welfare and Institutions Code.7 Recognizing that elderly persons are a “disadvantaged class in need of special protection,” the Legislature added Welfare and Institutions Code section 15657, authorizing the award of attorney’s fees and costs in elder-abuse cases. Prior to the enactment of this legislation, commonly known as the Elder Abuse and Dependent Adult Civil Protection Act (EADACPA), few civil cases were brought in connection with elder abuse due to problems of proof, court delays, and the bar’s lack of incentives to prosecute these types of suits. The Legislature specifically declared that, by adding Section 15657, it intended to “enable interested persons to engage attorneys to take up the cause of abused elderly persons.”8

The Legislature was particularly concerned about rising levels of abuse, neglect and abandonment of elderly persons by their families or caretakers. The Legislature has documented that nearly 225,000 Californians are victims of elder and dependent-care abuse each year and, as our population ages, the number of cases is expected to rise in the coming years.9 The Legislature recognized that the elderly are a disadvantaged class in need of protection from hidden acts of elder abuse. For these reasons, EADACPA not only established civil actions and remedies, but with Welfare and Institutions Code sections 15657 et seq. recognizes a right in the decedents’ successors in interest to bring these actions against alleged abusers.10

The Legislature is continuing in its efforts to protect seniors from elder abuse. On July 12, 2007, Governor Schwarzenegger signed into law Senate Bill 611, which will add Welfare and Institutions Code section 15657.01, allowing plaintiffs in elder­ financial-abuse cases to request attachment of the defendant’s property to recover any judgment filed against them.11 This recent legislation reflects the prevailing public policy that elder abuse is an important issue and requires special legislative measures to deter abusers and compensate those who prosecute them.

California law does not just create statutory rights of action for elders and their families to use when responding to abuse; the law also provides for double or treble damages, as a deterrent to elder abuse and neglect.12 Because seniors face unique challenges when seeking legal assistance, statutes which provide for punitive damages and attorney-fee awards increase the likelihood that seniors will receive adequate representation. These most important elements—punitive damages and attorney fees—are often lost when arbitration clauses are enforced. This is unconscionable, given that seniors often waive with a signature rights and protections of which they know nothing, leaving little incentive for lawyers to take their cases.

IV. ARBITRATION OF ELDER ABUSE CLAIMS: CAN IT BE AVOIDED?

Despite the public policy favoring arbitration, courts have become increasingly aware of several contexts in which arbitration agreements are unenforceable as a matter of law. To defeat a motion to compel arbitration, a plaintiff must show that public policy in his or her state prohibits enforcing the agreement, usually on the grounds that it is unconscionable. One such special circumstance is employment law, where courts have refused to enforce agreements lacking certain procedural protections.13

In 2000, the California Supreme Court set forth its requirements for enforcing and protecting statutory rights in arbitration. In an employment-law case, Armendariz v. Foundation Health Psychcare Services, Inc.,14 the court held that rights guaranteed under the California Fair Employment and Housing Act (FEHA)15 cannot be abridged by an arbitration agreement between employer and employee. To protect those statutory guarantees, the court imposed the following standards on arbitration of statutory claims: 1) the arbitration agreement must provide for a neutral arbitrator; 2) the agreement must provide for more than minimal discovery; 3) the arbitrator must produce a written award or disposition; 4) the process cannot limit relief guaranteed under the statute; and 5) the process may not require the employee to pay unreasonable expenses to access the arbitration forum.16

Recently, the United States Court of Appeals for the Ninth Circuit declined to compel arbitration in an employment dispute where the knowledgeable paralegal employee had signed an arbitration agreement with employer law firm O’Melveny & Myers. Davis v. 0’Melveny & Myers17 is one more example of the courts’ increasing skepticism of arbitration agreements in the special context of employment. The court reasoned that the arbitration agreement left the employee no opportunity to negotiate; the employee either had to bind himself to the arbitration agreement or leave the employer. This was unconscionable and unenforceable18 The Davis case reiterates that federal courts should apply state law regarding the formation of contracts when analyzing the enforceability of arbitration agreements.19 In California, this requires analyzing the procedural and substantive unconscionability of the agreement.20

Attorneys representing victims of elder abuse are now applying the Armendariz principles to defeat arbitration agreements on similar grounds. In this endeavor, attorneys will be aided by the Legislature’s recognition of seniors as a disadvantaged class and by the legislation enacted over the past 15 years. This legislation articulates a vibrant public policy to support elders and their successor representatives in the face of abuse and neglect. After Armendariz, it seems clear that California public policy will not support a motion to compel arbitration where an elderly plaintiff is asserting rights guaranteed under California law.

A. Elder Financial Abuse

The authors have successfully applied the Armendariz principles in the context of financial elder abuse. Arguing that arbitration was not an appropriate method of dispute resolution in elder-abuse cases, the authors compared the rights and remedies which are created for the elderly under EADACPA to the rights and remedies which are created for employees under FE1HA. Both statutes were created for a public reason: EADACPA was created to protect all elders from physical abuse, financial abuse, and neglect; FEM. was created to protect all employees from sex discrimination and sexual harassment in the workplace. Following the holding of the California Supreme Court in Armendariz, the authors argued that an arbitration agreement involving an elderly party must provide adequate safeguards for the selection of neutral arbitrators and must not unreasonably limit the plaintiff’s right to discovery; the arbitrator must be required to issue a written award; the agreement must allow the plaintiff all of the same types of recovery that he or she would be allowed in court; and, the agreement must not require the plaintiff to pay unreasonable costs or arbitrators’ fees.21

The groundbreaking litigation was brought by Evelyn Ugarte, successor trustee of the trust created by Frank Vierra (“Frank”), an 84-year-old retired school custodian. Frank entrusted his retirement savings to a financial advisor with WM Financial Services, Inc., an investment arm of Washington Mutual Bank. Unbeknownst to Frank, the financial advisor took advantage of Frank and depleted Frank’s assets to the point that he was virtually penniless when he died. After Frank’s death, Frank’s cousin, acting as successor trustee (the “Plaintiff”), filed suit against the financial advisor, his former employer WM Financial Services, Inc., and Washington Mutual Bank, for fraud, breach of fiduciary duty and elder financial abuse, among other claims.

Like every other customer who has ever opened an account at a bank or financial institution, when Frank opened his accounts at Washington Mutual, he signed a customer agreement which contained an arbitration clause. To no one’s surprise, Washington Mutual Bank and WM Financial Services, Inc. (“Washington Mutual”) moved to force Plaintiff into arbitration. However, because the case involved statutory claims of elder financial abuse, Plaintiff defeated Washington Mutual’s motion.

In Ugarte v Washington Mutual Bank,22 the authors argued that the same requirements Armendariz established for claims under FEHA should be applied to arbitration agreements involving EADACPA claims. The trial court agreed. The elderly are guaranteed certain rights and remedies which are generally not available to those under the age of 65 (i.e., the recovery of attorney’s fees and costs and the ability to triple exemplary or punitive damages). The authors argued that an elder cannot he denied those rights simply because he or she was forced to agree to an arbitration provision as a condition of opening a hank account. The court further agreed and, finding that Washington Mutual’s arbitration agreement contained none of the Armendariz minimum requirements, ruled that as a matter of law, Washington Mutual’s arbitration agreements were unconscionable at the time that they were made. Washington Mutual’s arbitration agreement. was unenforceable in Plaintiff’s elder financial abuse case and the court refused to order the case to arbitration.

In a later case, the First District Court of Appeal upheld a trial court denial of a rehabilitation center’s motion to compel arbitration. In Fitzhugh v. Granada Heathcare and Rehabilitation Center, LLC. et al, the court held that in enacting EADACPA, the legislature was expressing the public policy that, “under no circumstances may a patient or resident waive his or her right to sue for violations of rights under the Patients Bill of Rights, or other federal and state laws and regulations, which would include the existing Elder Abuse and Dependent Adult Civil Protection Act.23 The court went on to say that the Legislature has acted in certain terms to protect the elderly as a particularly vulnerable class and that to enforce arbitration agreements against seniors is a violation of public policy.

B. Nursing Homes

Compelling seniors to arbitrate may be objectionable not only in the financial abuse context, but also in cases against hospitals and nursing homes. The nursing home environment, however, presents additional issues which makes it less certain whether plaintiffs may successfully rely on the Armendariz principles. Particularly challenging in these cases is that often the person who signs the arbitration agreement is not the senior but is instead the senior’s agent under an advance heath care directive.

In Garrison v. Superior Court,24 an ailing senior designated her daughter to be her attorney in fact and placed no restrictions on her daughter’s agency power. The daughter signed an arbitration provision on her mother’s behalf when she admitted her mother for care at a nursing facility. The court considered an array of statutes when determining whether a durable power of attorney for health-care decisions includes the right to bind a patient to arbitration. Because the power of attorney was granted for the purpose of making health-care decisions, the court read Probate Code sections 4683(a), 4684 and 4688 to include the power to bind the patient and their successors to arbitration. The extensive power granted in the durable power of attorney was central to the court’s holding that the arbitration provision relied on by the nursing home would be enforced over the family’s objections. The court noted that the durable power of attorney specifically stated that it was executed so as to facilitate health-care decisions.25 When the mother died and the family sought to pursue actions for elder abuse and medical malpractice against the care facility, the family was forced to arbitrate the dispute based on the agreement signed by the daughter at the time of admission. In Garrison, the durable power of attorney specifically referenced the Probate Code. This, the court found, supported the proposition that the daughter had wide discretion in her mother’s care.

In Hogan v. Country Villa Health Services,26 the Fourth District Court of Appeal also ruled for a nursing home in a case to compel arbitration. The court reasoned that because the daughter (pursuing damages after her mother’s death) had been authorized to make health-care decisions for her mother, it was within the daughter’s agency to bind her mother and her mother’s successors to arbitration. This durable power of attorney which established the daughter’s agency was key to the court’s holding. The court cited a variety of other medical care cases to support its rationale that power of attorney agency allows parties to bind one another to arbitration clauses. The plaintiff relied most heavily on the court’s earlier decision in Garrison. Principally, the court noted that the daughter had been authorized to make such decisions under Probate Code section 4701.

On appeal, the plaintiff family in Hogan raised the concerns of the Armendariz case and argued that public policy mandated setting aside the arbitration agreement, but the family did not raise this argument at trial. Because the issue was raised for the fast time on appeal, the court held this argument to be waived. Thus, the Court of Appeal has yet to provide guidance on whether the Armendariz principles affect enforceability of an arbitration agreement signed by an agent under a durable power of attorney. Further complicating matters, not all durable powers of attorney are executed pursuant to statute.

Just two weeks after ruling in Hogan, the Fourth District spoke again to elder abuse issues. In Flores v. Evergreen at San Diego, LLC,27 the court declined to uphold an arbitration provision signed by a husband when admitting his wife to a facility. At the time of admission, the husband did not have his wife’s power of attorney and the court found that marital status alone was not sufficient to establish the husband’s right to submit his wife’s claims to arbitration. Certainly there was no statutory authority granting the husband such agency which, considering the public policies evident in elder-abuse prevention statutes, should not be implied. And, although the wife later granted the husband a power of attorney, the instrument was not prepared pursuant to statutory guidelines, was narrowly construed and could not be used to ratify the husband’s earlier actions. The court’s ruling was justified not only by the absence of express statutory authority granting agency to the husband, but by the “plethora of statutes and regulations” meant to ensure that arbitration agreements are obtained with informed consent and are limited in scope.28

Among these safeguards is California Civil Code section 1599.81, which requires arbitration agreements. to be on forms separate from the form admission and treatment contracts. The court also cited Civil Code section 1430, which forbids binding arbitration for violations of the Patients Bill of Rights or other statutory or regulatory rights. The Flores court concluded by noting, “because arbitration agreements waive important legal rights, the Legislature has imposed heightened requirements on arbitration provisions in nursing home contracts.”29

The question remains what would happen if principals specifically excluded from their durable powers of attorney the right to bind the principal to an arbitration provision. Would providers still contract with seniors’ families to give seniors the care they need? Or would the existence of such a prohibition make it impossible for an agent to gain for the principal admission to a care facility? What would happen if an agent prohibited from agreeing to arbitration nevertheless signed an arbitration agreement? If the principal later suffered actionable harm, would the prohibition on arbitration be enforceable? Or could the defendant compel arbitration by arguing its reliance on the arbitration agreement?

V. CONCLUSIONS

Although the cases involving claims under EADACPA should, as a matter of law, preclude attempts to arbitrate, efforts to codify in EADACPA a prohibition against arbitration have been fiercely opposed. Hope is not lost, however. The impact of the trial court’s ruling in the Washington Mutual case and the appellate holding in Fitzhugh extends beyond the bounds of these two cases. Now, any financial institution, nursing home, health maintenance organization, hospital, or any other person or entity who contracts with an elder (i.e., any person age 65 or older) must be on notice. If an entity or its employee neglects or abuses an elder, the arbitration agreement will likely be unenforceable, unless the arbitration agreement meets certain minimum requirements. Absent these requirements, disputes alleging abuse or neglect of an elder likely will be decided by a jury, rather than an arbitrator. Juries have the power to award punitive damages, and under the appropriate factual circumstances, can also award double and treble damages, including punitive damages. The court’s ruling in the Washington Mutual case was clearly a victory for Plaintiff, but it was also a victory for all susceptible persons 65 years and older, for their families and for their advocates.

ENDNOTES

  1. Fitzhugh v. Granada Heathcare and Rehabilitation Center, LLC. et al. (2007) 150 Cal.App.4th 469.
  2. 9 U.S.C. § 1, et seq.
  3. Stats, 1927, ch.225.
  4. Gilmer v. Insterstate/Johnson Lane Corp. (1991) 500 U.S. 20, 25.
  5. Morgenson, When Winning Feels a Lot like Losing (Dec. 10, 2006) N.Y. Times, business section pages 1 and 10.
  6. Sangree, Stubborn PC Owner Takes on Gateway (June 7, 2007) Sacramento Bee, pages B1 and B2.
  7. Well. & Instit. Code, § 15600 et seq.
  8. Welf. & Inst. Code, § 15600(j).
  9. Assembly Concurrent Resolution No. 8 (Dymally, Jan. 14, 2005).
  10. Code Civ. Proc., k 377.30.
  11. Stats 2007, Chapter 45, Welf. & Inst. Code, § 15657.01.
  12. Prob. Code, § 859 and Civ. Code, § 3345.
  13. Davis v. O’Melveny & Myers (2007) 485 F. 3d 1066.
  14. Armendariz v. Foundation Health Psychcare Services, Inc (2000) 24 Cal. 4th 83.
  15. Gov. Code, §§ 12900 et seq.
  16. Id. at 102.
  17. Davis v. O’Melveny & Myers, supra, 485 F. 3d 1066.
  18. Id. at 1075.
  19. Id. at 1068.
  20. Circuit City Stores, Inc. v. Adams (9th Cir. 2002) 279 F. 3d 889, 892.
  21. Armendariz, supra, 24 Cal. App. 4th 83.
  22. Sacramento Superior Court Case No. 01-AS06203- Evelyn Ugarte (Successor Trustee of the Frank Vierra Family Trust Dated April 20, 1999) v. Washington Mutual Bank FA. et al.
  23. Fitzhugh v. Granada Heathcare and Rehabilitation Center; LLC. et al., (2007) 150 Cal.App.4th 469, 476 (emphasis added).
  24. Garrison v Superior Court (2005) 132 Cal.App.4th 253.
  25. Id. at 258.
  26. Hogan v. Country Villa Health Services (2007) 148 Cal. App. 4th 259.
  27. Flores v. Evergreen at San Diego, LLC. (2007) 55 Cal. Rptr. 3d 823, 828.
  28. Id. at 830.
  29. Id. at 832.

California Trusts and Estates Quarterly
Volume 13, Issue 3
Fall, 2007

Blind Internet Users Victorious in Discrimination Action Against Website

Earlier this month, a California district court certified a class on behalf of blind internet users against Target.com under the American Disabilities Act and California law. National Federation of the Blind v. Target Corp. (N.D. Cal. Sept. 28, 2007). The class claims that the Target.com website is inaccessible to the blind and therefore violates federal and state laws prohibiting discrimination against the disabled. This ruling should give notice to website owners that websites, especially those available in California, should be made to be accessible to the blind.

The plaintiff, a blind college student, uses the internet for various reasons, including shopping. The plaintiff goes online to compare prices, research goods and make decisions about making purchases at physical stores. The plaintiff uses a screen reading software device to access the internet. The software reads embedded data on a website and vocalizes this information to the blind user. The plaintiff claims that the Target.com website fails to use such embedded data despite it being technologically simple and not economically prohibitive. The plaintiff claims that since Target.com lacks this embedded data, blind users are unable to navigate the website and are denied full and equal access to the physical target stores.

The court certified classes in this case based on federal and state law. The nationwide claim is based on the ADA’s requirement that all disabled people have full and equal enjoyment to goods and services of any place of public accommodation. Courts have been reluctant to hold websites to the standards set forth by the ADA because they are not considered to be a place of public accommodations. The court in this case, however, recognized that Target.com’s inaccessibility issues may have hindered the plaintiffs’ full enjoyment of the physical stores. The court found that Target’s physical store and its website are highly integrated. Many internet users use the website to pre-shop before shopping in the physical store. Target.com was inaccessible to the blind, and they were prevented from pre-shopping which caused some blind users to expend extra time and expense in shopping. In some cases, the blind users were diverted to more user friendly websites. The court held that the nexus between the website and the physical store was enough to cause harm to blind users who could not access the Target.com website. In these situations, plaintiffs who were unable to pre-shop did not have full and equal enjoyment of the goods and services at the physical stores.

Unlike the ADA, the California state disability laws do not require a nexus between a website and a physical store. The California Unruh Civil Rights Act and the Disabled Person Act (DPA) is not limited to restrictions on public accommodations. The Unruh Act regulates “all business establishments of every kind whatsoever.” Cal Civ. Code § 51(b). The DPA addresses “an accommodation, advantage, facility, and privilege of a place of public accommodation” and “other places to which the general public is invited.” Id. § 54.1(a)(1). Thus, the language of both statutes is broader than that of the ADA. The court reviewed the legislative history of both acts and determined that the nexus requirement is not required between the website and the physical store. Specifically, one court recently held that “business establishments” under the Unruh Act included an exclusively internet-based adoption agency. Butler v. Adoption Media, LLC, 486 F.Supp. 2d 1022, 1054 (N.D. Cal. 2007). In that case, the adoption agency discriminated against same-sex domestic couples in favor of married couples. The court found that no nexus was needed between the website and the physical place.

The DPA also is more expansive than the ADA. The DPA includes both physical and non-physical places and “other places where the public is invited.” There are no cases that hold that websites are included in “other places.” The court, however, holds that the there are no cases that exclude websites under this definition. In addition, the broad language of the DPA comfortably could include websites as places where the public is invited to. The court, therefore, found it was not necessary to find a nexus between the website and a physical store as the ADA requires.

This distinction may have important ramifications for web-based business in California. Under California law, it will be much easier for a plaintiff to prove harmed by a website for failing to provide full and equal enjoyment to its blind users. The plaintiff, in order to prevail, would simply need to show that they are injured in some way by not being able to access the website. The ADA, on the other hand, requires that there must be some nexus between the website and the physical store. Website owners should take note because this ruling will make it easier for claims to be brought against websites for disability discrimination, especially in California.

Experts and Summary Judgment

Intellectual property litigation relies heavily upon the use of expert testimony. The Ninth Circuit Court of Appeals recently analyzed the intersection of Federal Rules of Evidence, Rule 702 and the ruling in Daubert v. Merrill Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993) (“Daubert”) concerning the admissibility of expert testimony and Federal Rules of Civil Procedure, Rule 56 for summary judgment. Stillwell v. Smith & Nephew, Inc., 482 F.3d 1187 (9th Cir. 2007). Admissibility of expert testimony must be carefully evaluated for reliability and helpfulness, but that is different than the analysis for whether a triable issue of fact is established.

In Stillwell, the plaintiff had both legs broken in a car accident. The fractures were stabilized with two reconstruction nails. The nails failed during the healing process, and plaintiff brought suit against the nail manufacturer alleging claims for strict liability, negligence, and breach of warranty.

Defendants sought summary judgment on the grounds that plaintiff could not establish causation. Plaintiff offered the testimony of a metallurgical expert who testified that the nails suffered from correctible design and manufacturing defects that shortened their life. The expert could not quantify the length by which the life of the nails was shortened. Plaintiff’s expert repeatedly testified that his expertise was in metallurgy as opposed to medicine or biomechanical engineering.

Defendants sought to exclude the testimony of plaintiff’s expert under Federal Rules of Evidence, Rule 702 and under the holdings in Daubert. Plaintiff’s expert had repeatedly acknowledged that his expertise was in metallurgy and not biomechanical engineering. The expert’s own testimony established that he did not have the expertise to testify regarding the design of the nail as a medical device; he could only analyze it with respect to its metallurgical qualities. The expert admitted he was not qualified to challenge the testimony of the medical doctors that the nails did not fail during the time in which plaintiff’s fractures should have healed and that other unforeseen and unexpected circumstances delayed plaintiff’s healing process. Defendants argued that plaintiff’s expert was not qualified to testify regarding the design, manufacture, or use of the nail as a medical device.

The district court, applying Daubert, concluded that the expert “acknowledged that he lacked the expertise to determine whether the nails served the biomechanical purpose for which they were designed.” The district court found that the question was not whether the nail would suffer fatigue failure, but rather whether the nail was designed to fail only after it succeeded in supporting the union of the fractured bone. The court excluded the expert’s testimony and granted summary judgment for defendants.

Plaintiff appealed on the sole ground that the court improperly excluded her expert’s testimony. An exclusion of testimony is an application of a rule of evidence that the Ninth Circuit reviews for abuse of discretion. (United States v. Prime, 431 F.3d 1147, 1152 (9th Cir. 2005).)

The Ninth Circuit agreed that the district court improperly excluded the expert’s testimony. Federal Rules of Evidence, Rule 702 permits testimony by experts qualified by “knowledge, skill, expertise, training, or education” to testify on matters that will “assist the trier of fact to understand the evidence or to determine a fact in issue.” Rule 702 embodies “the twin concerns of ‘reliability’ and ‘helpfulness.’” (United States v. Mitchell, 355 F.3d 215, 234 (3d Cir. 2004).) The question of reliability, however, is “not the correctness of the expert’s conclusion, but the soundness of his methodology.” (Daubert v. Merrill Dow Pharmacy, 43 F.3d 1311, 1318 (9th Cir. 1995).) The Ninth Circuit found that the district court focused on the helpfulness, rather than the reliability, of the expert’s testimony in excluding the testimony. The district court improperly blended the rules of admissibility under Federal Rules of Evidence, Rule 702, with the standard for summary judgment under Federal Rules of Civil Procedure, Rule 56. The Ninth Circuit found that a “[d]istrict court may not exclude expert testimony simply because the court can, at the time of summary judgment, determine that the testimony does not result in a triable issue of fact.” The appellate court noted that, in focusing on the eventual merit of plaintiff’s claims, the district court improperly required the expert testimony to establish not only alleged defects, but also causation.

Although plaintiff won the Rule 702 battle, she lost the war. The Ninth Circuit went on to say that this was a “rare case in which it is proper for [the appellate court] to exercise our discretion to consider a legal issue for the first time on appeal.” The court evaluated the evidence submitted with respect to causation and found that the underlying issue common to all of plaintiff’s claims was the existence of a defect in relation to the product’s intended purpose. The plaintiff’s evidence that the nail contained a design defect that shortened its life was not adequate to refute defendants’ evidence that the nail performed as intended and that the nail’s failure before the bone’s healing is a rare event.

The analysis in Stillwell highlights the different analysis concerning the admissibility of expert testimony as compared to the ultimate legal question. This distinction is an important one for trial attorneys in preparing to use any expert testimony, be it in summary judgment, trial, or motions for interim relief. The final decision in Stillwell left plaintiff with a hollow victory under the Rule 702, but losing on causation. Proper understanding of the difference between the “reliability” and the “helpfulness” dual prongs is critical to maximize the value of expert testimony.

California Supreme Court Affirms Broad Immunity for Defamatory Republication on the Internet

When can you knowingly republish defamatory statements without risk of liability? When you do so on the Internet.

The California Supreme Court, in Barrett v. Rosenthal (November 2006) 40 Cal.App.4th 33, followed the line of federal cases interpreting the Communications Decency Act of 1996 (CDA) to find broad immunity for both Internet service providers and users of an interactive computer service for republishing defamatory statements.

In the Barrett case, two doctors brought an action alleging libel and libel per se against an alternative health proponent who had posted messages on Internet news groups referring to the doctors as “quacks.” The defendant also redistributed an email message prepared by another author which alleged that one of the plaintiff doctors had stalked women. The trial court granted defendant’s SLAPP motion, finding that the comments concerned an issue of public interest and ruling that the republication of the third party email was immunized by the CDA. The court of appeal vacated the order, finding that the CDA did not protect the defendant from common law liability for defamation as a “distributor” of the article written by the third party. The Supreme Court granted cert. to determine whether the CDA confers immunity on “distributors.”

The CDA provides:

“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” (47 U.S.C. § 230(c)(1).)

The plaintiff doctors argued that section 230 did not abolish liability for “distributors” of defamatory statements, arguing that the CDA grants immunity only to the service provider who publishes the defamatory statement, but not to the individual who distributes knowingly defamatory statements authored by another.

Under common law, a “distributor,” such as newspaper vendors or booksellers, is liable only if the distributor knew or had reason to know of the defamatory nature of the material. On the other hand, a “publisher,” such as the newspaper where the defamatory statement originally appeared, is liable even without notice. The plaintiff doctors acknowledged that section 230 expressly provides for immunity for the “publisher,” but did not create absolute immunity for the “distributor” of the defamatory statement. A central component of plaintiffs’ argument, which was adopted by the court of appeal, was that there should be a difference between Internet service providers and individuals who use the Internet.

The California Supreme Court followed the holding of Zeran v. AOL (4th Cir. 1997) 129 F.3d 327, in finding that Congress did not intend to exempt “distributors” from the broad immunity granted by the CDA. The Supreme Court noted that section 230(c) specially extends the immunity to both a “provider” and to a “user” of the interactive computer service, making no distinction between the two. The court noted that the common law distinction between a publisher versus a distributor has very little meaning in the context of the Internet. Publication is a necessary element of all defamation claims and includes every repetition and distribution of a defamatory statement. In fact, “distributors” are frequently referred to as “republishers.” However, in light of plaintiffs’ argument, the Supreme Court requested additional briefing on the statutory term “user” and whether there is a different immunity analysis if a user engages in “active” versus “passive” conduct.

The appellate court, in finding for “distributor” liability, did not draw any distinction between an Internet service provider and an individual user in finding that a distributor who has notice of the defamatory statements is not immune from liability. The Supreme Court recognized that “users,” like the defendant in this case, were situated differently than a service provider in that individual users were not faced with the massive volume of posting that could subject them to liability for distributing defamatory statements. Nevertheless, the Court found that the term “user” is not defined in section 230, nor did the legislative record reflect why Congress included “users” as well as service providers under the broad umbrella of immunity granted by the CDA. Absent Congressional history drawing a distinction between a “provider” and “user,” the Supreme Court found that both are entitled to the broad immunity.

The plaintiff doctors attempted to argue that someone who republishes defamatory statements is no longer involved in passive Internet use but is actively posting or republishing the information and, as such, is an “information content provider” unprotected by the statutory immunity. An “information content provider” is defined as “any person or entity that is responsible, in whole or in part, for the creation or development of information provided through the Internet or any other interactive computer service . . ..” (Section 230(f)(3).)

The Supreme Court rejected the plaintiffs’ argument, noting that the argument failed to recognize that the immunity granted by section 230(c)(1) expressly prohibits treating any “user” as the publisher or speaker of the defamatory comment. Congress obviously had a broad meaning by the use of the term “user.” Moreover, the Court rejected the argument, attempting to distinguish between “passive” and “active” users. Attempting to draw such a fine distinction would have a chilling effect on online speech – the whole intent behind the Congressional grant of immunity. If distributors could be liable if they had notice of the defamatory statement, there would be great pressure simply to remove the allegedly defamatory statement. The distributor only faces liability by failing to remove the allegedly defamatory statement, but no liability if it improperly removes non-defamatory content. Secondly, the standard of “known or should have known” defamatory nature of the content would defeat the legislative goal of encouraging the self-policing efforts by Internet service providers to remove harmful or obscene content. The Supreme Court did note that, at some point, active involvement in picking and choosing to republish only certain provisions out of an allegedly defamatory publication could expose a defendant to liability as an original source of the material. However, because defendant Rosenthal republished the defamatory work in whole, the Supreme Court did not determine when that might occur. It should be noted, however, that federal cases have reasoned that making modifications to the prior work which do not go beyond the traditional editing function would not defeat a defendant’s immunity under the CDA.

The Supreme Court echoed policy concerns raised by the plaintiffs and some commentators that granting broad immunity to users of the Internet failed to properly consider the public interest in providing redress to victims of Internet defamation. Allowing individuals to knowingly republish defamatory statements on the Internet has broad societal implications, but is a legislative concern. The Supreme Court noted that the Congressional record, as well as the express language of section 230, expressly extends its broad immunity to Internet service providers as well as users and makes no distinction between active and passive use. A victim of defamatory statements published on the Internet only has recourse against the original author of the defamatory statement. Any remedies beyond the original author must await Congressional action.

Employers: You May Be Eligible for Immunity Under the Communications Decency Act

A California appellate court affirmed last month that an employer is entitled to immunity from tort liability for threatening emails sent on or through the employer’s internet/email system by one of its employees. On December 14, 2006, the Sixth Appellate District in the case Delfino v. Agilent Technologies, Inc., 2006 WL3635399, affirmed summary judgment in Agilent’s favor finding that Agilent, as an employer, was immune from tort liability under the Communications Decency Act of 1996 (“CDA”) for threatening emails sent and posted by one of its employees. This case, apparently one of first impression, extended the immunity protections of the CDA to cover corporate employers who provide their employees with internet access through internal computer systems. Employers thus have additional protection from claims that their employees have used the employer’s computer system to commit torts against third persons.

In Delfino, Plaintiffs Michelangelo Delfino and Mary E. Day claimed that an Agilent employee, Cameron Moore, sent a number of anonymous threats over the internet and that he used Agilent’s computer system to send and post these threats. Plaintiffs also alleged that Agilent was aware that Moore was using Agilent’s computer system to threaten plaintiffs but took no action to prevent its employee from continuing to make these threats. Moore’s threats against plaintiffs were allegedly sent in email messages directly to plaintiffs or were contained in messages posted on a Yahoo message board. Plaintiffs sued Moore and Agilent for intentional infliction of emotional distress and negligent infliction of emotional distress. [1]

Agilent moved for summary judgment, which was granted by the trial court on March 18, 2005, on the ground that it was immune from liability under 47 U.S.C. § 230(c)(1), one provision of the CDA. The plaintiffs appealed the summary judgment asserting that Agilent was not immune from suit under the CDA and had failed to take measures to protect plaintiffs from its employee’s threatening communications.

The Delfino Court looked to the language of § 230(c)(1), which provides in pertinent part, “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” The CDA preempts any state law causes of action (such as negligence) that are inconsistent with the CDA: “No cause of action may be brought and no liability may be imposed under any state or local law that is inconsistent with this section.” (47 U.S.C. § 230(e)(3).)

Agilent argued that CDA immunity applied to the plaintiffs’ claims because sought to impose derivative liability against Agilent for its employee’s internet communications. Agilent argued that it was immune since it was simply a provider of an interactive computer service, i.e. the computer network provided to its employees for work purposes.

The CDA was enacted in 1996 with the “primary goal . . . to control the exposure of minors to indecent material” over the internet. The Delfino Court recognized that “an important purpose of [the CDA] was to encourage [internet] service providers to self regulate the dissemination of offensive materials over their services.” (citing Zeran v. America OnLine, Inc. (4th Cir. 1997) 129 F.3d 327, 331, cert. denied (1998) 524 U.S. 937.)[2] The Delfino Court also noted that a second goal of the CDA was to avoid the chilling effect upon internet free speech that would be occasioned by imposing tort liability upon companies that do not create harmful messages, but rather, are intermediaries for their delivery. Thus, CDA immunity is available to an interactive computer service provider or user who undertakes good faith efforts to restrict access to objectionable material.

The Delfino court recognized that for immunity to apply, Agilent had to establish three elements: “(1) the defendant [is] a provider or user of an interactive computer service; (2) the cause of action treats the defendant as a publisher or speaker of information; and (3) the information at issue [is] provided by another information content provider.” (Citing Gentry v. eBay, Inc. (2002) 99 Cal.App.4th 816, 830.)

It is this first element, whether Agilent was “a provider or user of an interactive computer service,” that the case hinges upon. The Delfino Court reasoned that “[c]ourts have noted that the CDA has interpreted the term ‘interactive computer service’ broadly.” Although the Delfino court was not aware of any case that had held that a corporate employer could be a provider of interactive services for CDA immunity purposes, the Court cited several legal commentators who had observed that an employer who provides its employees with internet access through a company’s internal computer system should be entitled to CDA immunity. The Court recognized that, given the advances over the last ten years, “internet resources and access are sufficiently important to many corporations and other employers that those employers link their office computer networks to the internet and provide employees with direct or modem access to the office network (and thus to the internet).”

The Court also found that Agilent met the definition of the term “interactive computer service” as defined in section 230(f)(2) because it provided or enable “computer access by multiple users [i.e., Agilent employees] to a computer server.” Thus, in light of the broad definition under the CDA, the Delfino Court concluded that “Agilent was a provider of interactive computer services.”

The Court then turned to the second element, whether “the cause of action treated the defendant Agilent as a publisher or speaker of information.” Plaintiffs contended Agilent knew that (1) Moore was sending threatening messages; and (2) that he was using Agilent’s computer system to do so. Agilent submitted undisputed evidence in support of its motion to rebut these allegations. The Court reasoned that plaintiffs were essentially alleging that as Moore’s employer, Agilent should be treated “as a publisher or speaker” of Moore’s messages. The court recognized that, although many CDA immunity cases had been limited only to defamatory causes of action, “it is clear that immunity under section 230 is not so limited.” Given that plaintiff sought to impose negligence liability against Agilent as a result of its employee’s threatening messages, the Court concluded “that the claims against Agilent treated it ‘as a publisher or speaker’ . . . of Moore’s messages and that plaintiffs claims were among those to which immunity under the CDA potentially applies.”

Finally, the Court reached the third element, whether “the information at issue [was] provided by another information content provider.” The Court found that Moore was undoubtedly the party who authored the offensive emails and postings and that “there was no evidence that Agilent played any role whatsoever in the ‘creation or development’ of those messages.” The Delfino Court concluded that the trial court had properly found that Agilent was entitled to immunity under the CDA and summary judgment was properly granted.

Although employers are entitled to immunity under the CDA, employers must remain vigilant as to their employees’ use of the employer’s computer system. Immunity under the CDA is only available provided the employer has taken action in good faith to prevent or restrict objectionable materials from its computer system. In Delfino, Agilent quickly investigated and took appropriate actions against its employee, including a reprimand, once it learned of Plaintiffs’ claims. Agilent further cooperated with the FBI in its investigation into Moore’s threats. Thus, it is clear under Delfino that an employer may not be eligible for immunity should it turn a blind eye to its employee’s misuse of its computer system.

Your Cell Phone Is A Homing Beacon

Here’s the next step Big Brother is taking toward an Orwellian 1984: Your cellular telephone can pinpoint your location any time it’s turned on. That’s right. Any time your cell phone is turned on and within range of a cellular tower, it is communicating with that tower to broadcast your location. It has to. Otherwise you couldn’t get your incoming calls. Federal law enforcement agencies have figured this out, and if you are someone a federal law enforcement agency is looking for, they are using that to track you.

Here’s how it works: These days, everyone has a cell phone. Since the end of 2005, the Federal Communications Commission has mandated that cell phone service providers must be able to locate 67% of all callers to within 100 meters, and 95% of all callers within 300 meters. Cell phone companies have a variety of ways of doing this. They can triangulate your position by using three cell towers to fix your position. Others have gone one step further, and most new cell phones come with a GPS chip which can be used to pinpoint your position to within a few feet. The cell phone companies record your location data as determined either through triangulation or from the GPS chip, and store it as “historical location” information. An important feature in this equation, however, is the ability of your cell phone service carrier to transmit “real-time” location information (of your cell phone, anyway) to law enforcement at any time. And since “everyone” carries their cell phone, the government has a pretty good chance of tracking you down if they need to. Big Brother is watching.

Now this is not necessarily a bad thing. If you are someone wanted by the FBI or another federal law enforcement agency, maybe the FBI should be able to get information from your cell phone company that would pinpoint your location. In fact, no one is seriously saying that the FBI cannot get access to that information. The real question is rather what showing is required for the government to gain such access. As to historical location information, the Stored Communications Act, 18 U.S.C. ¬ß¬ß 2701 et seq., provides that the government need only demonstrate ‘articulable facts as to why such records are relevant to an ongoing investigation.’ This is a significantly lower showing than the government must make to get a search warrant. For that, it must demonstrate ‘probable cause that the information sought will lead to evidence of a crime.’ The government is asserting that they need only satisfy this same rather lax ‘articulable facts’ standard for getting real-time location information rather than showing probable cause that the information will yield evidence of a crime. The question of required showing by the government has been causing quite a stir in the federal courts recently.

The first court to publish a decision regarding the government’s required showing was the Southern District of New York. On August 25, 2005, Magistrate Judge James Orenstein denied the government’s request for real-time cell site location information. The court had previously granted the government’s request for installation and use of a pen register and trap and trace device, which allowed the government to obtain the numbers which call the phone or are called by it, and the time those calls are made. The pen register and tap and trace device are clearly available by federal statutes, including 18 U.S.C. ¬ß¬ß 2703, 3122, and 3123. But the importance of this decision is that Judge Orenstein denied the site location information that would provide real-time location because the government failed to provide information establishing the probable cause that would be required for a warrant. The judge noted that he had granted similar requests in the past, and quoted Justice Frankfurter: “Wisdom too often never comes, and so one ought not reject it merely because it comes late.

Following Judge Orenstein’s stand, several magistrate judges have been confronted with similar requests for location information derived from cell phone tracking. In fact, a dozen decisions have issued regarding the requested cell site information since that decision. The requests at issue, like the request Judge Orenstein confronted, were not accompanied by affidavits establishing probable cause that evidence of a crime would be discovered. Instead, the government stated that the information would be relevant to an ongoing investigation, thus apparently satisfying the less stringent standard required to get the historical location information. All but two of these decisions have denied the government’s request.

On December 20, 2005, Magistrate Judge Gabriel W. Gorenstein, of the Southern District of New York, became the first to agree with the government’s arguments in a published opinion. While it is a complex issue, the court reasoned that the cell location information sought was covered by the Pen Register Statute, which would provide authority for the order if not for a provision of 47 U.S.C. ¬ß 1002. That section, part of the Communications Assistance for Law Enforcement Act of 1994, provides that information acquired solely pursuant to the authority of pen registers and trap and trace devices shall not include any information that may disclose the physical location of the cell phone customer. Judge Gorenstein found that the information sought was not acquired solely pursuant to the authority of pen registers and trap and trace devices.

Almost every other published case has disagreed with Judge Gorenstein. Only Magistrate Judge Hornsby in Louisiana has agreed with Judge Gorenstein. (A magistrate judge in West Virginia granted the government’s request. It did so, however, after rejecting the government’s arguments about statutory authority for the cell location information and holding instead that the individual in question had no expectation of privacy in the cell phone because the phone in question did not belong to him. It belonged to a friend.)

Almost all of these cases have another similarity. In each case, the magistrate judge issuing the opinion denying the government’s request has invited the government to seek review of the denial so that the magistrate judges will have guidance as they continue to encounter this issue. The government has not yet seen fit to seek review of any of these cases. As the government appears ex parte in each case, and the individual never even knows he is being tracked, there is no one else to seek review. Thus, the government seems willing, and able, to deprive the courts of any higher level guidance of the required showing it must make to receive the cell location information it seeks.

As technology continues to advance, law enforcement naturally looks to find ways to use that technology to improve its efficiency. The concern must be drawing the proper line between efficiency of law enforcement and protecting the privacy of the citizens. It is up to the courts to recognize, as Judge Orenstein did in this case, when that line is approached, and when it is crossed. And when magistrate judges across the country invite the government to seek review of their decisions to provide guidance from higher courts and the government declines all such requests, instead remaining content with the rulings against them, it begins to raise suspicions. If this is a valuable tool for law enforcement to use to protect citizens more efficiently and effectively, and clearly it is, why does the government resist all efforts to establish the limits of the use of that tool? Big Brother?

The Attorney General’s Google Search Comes Up Empty – So Far…Is Your Online Privacy At Stake?

It was just a simple discovery tool, used by the Department of Justice in defense of a lawsuit brought by the American Civil Liberties Union. It hasn’t gotten much attention. In fact, for several months, it got no attention at all. But it’s starting to. So, what is “it?”

On August 25, 2005, Alberto Gonzales, U.S. Attorney General, issued a subpoena to Google, Inc., the online search engine used by millions every day to navigate the Internet. In this subpoena, the Attorney General demanded that Google, who was not a party in the case, produce “1. All URL’s that are available to be located through a query on your company’s search engine as of July 31, 2005,” and “2. All queries that have been entered on your company’s search engine between June 1, 2005, and July 31, 2005.” In essence, the Department of Justice was asking Google to produce the Internet, and a list of all searches on the Internet for two months.

The demand comes at a time when the issue of privacy and governmental intrusion is becoming a concern to more and more citizens. The U.S. Patriot Act, a controversial law granting the government significant investigative power, is up for renewal. This Act has many opponents in the government and in the private sector due to the intrusive nature of the powers it affords to federal law enforcement agencies. The government is also coming under considerable fire for the widely-reported wiretaps it used to fight terrorism.

This subpoena is not being used to fight terrorism. The purpose for this subpoena is to defend the constitutionality of the Child Online Protection Act-a law that requires commercial Web sites to shield minors from materials that may be harmful to them or face potential criminal penalties including prison. As stated in the declaration of government expert Dr. Philip Stark, Professor of Statistics at the University of California at Berkeley, “reviewing URL’s available through search engines will help [the government] understand what sites users can find using search engines, to estimate the prevalence of harmful-to-minors (HTM) materials among such sites, to characterize those sites, and to measure the effectiveness of content filters in screening HTM materials from those sites.” Further, “reviewing user queries to search engines will help [the government] understand the search behavior of current web users, to estimate how often web users encounter HTM materials through searches, and to measure the effectiveness of filters in screening those materials.” This information, the government says, would assist its “efforts to understand the behavior of current web users, to estimate how often web users encounter harmful-to-minors material in the course of their searches, and to measure the effectiveness of filtering software in screening that material.”

Not surprisingly, Google objected to the demand, claiming the demand was too broad, burdensome, and intrusive. The Department of Justice and Google worked toward a compromise regarding the subpoena. The Department agreed to limit its request to only one million random URL’s and a random sampling of one million search queries submitted to Google on any given day. However, Google still objected to the demand, and refused to comply with the subpoena. According to Google, complying with the demand would require it to divulge important trade secrets, and would require divulging information about the individuals that use its service, and even potentially revealing personal identifying information about its users.

This dispute went largely unnoticed by the public until January 18, 2006, when the Attorney General filed a motion to compel compliance with the subpoena in a federal court in San Jose. The motion to compel states that “after lengthy negotiations, the Government has narrowed this request to seek the production of an electronic file containing ‘the text of each search string entered onto Google’s search engine over a one week period (absent any information identifying the person who entered such query.)'”

Filing this public motion got some attention. The story was reported in the major newspapers and on online news sites when the motion was filed. Privacy groups, such as the World Privacy Forum and the Electronic Privacy Information Center are rallying behind Google’s stance resisting the subpoena. Many of these organizations are filing amicus briefs with the court. Not to be left out, Congress is also becoming involved. Sen. Patrick Leahy sent the Attorney General a request for information regarding the subpoena, including the potential for production of personal identifying information and any safeguards to prevent such production. Representative Ed Markey said he intends to introduce legislation to curb records retained by Web sites.

It will be interesting to watch this dispute play out. Google’s response to the motion is due on February 17, 2006, and the government’s reply is due on February 24th. Amicus briefs are also due February 24th, and the hearing on this motion has been moved to March 13th.

Lost in this dispute is the fact that the subpoena to Google was only one of the subpoenas issued by the Attorney General. America Online, Microsoft Network, and Yahoo apparently did not challenge the subpoenas. Have you used any of these search engines lately? Do you remember what search strings you used?