West Moves to Overturn $5M Defamation Verdict

Posted by joseph bahgat on January 20, 2011

David Thomson, Thomson Reuters Chairman

Follow-up: Jury Awards Professors $5M in Defamation Suit Against West

 

No surprise here; West Publishing has filed a motion to set aside the jury's $5,000,000 verdict in the case brought against them by the two law professors whom West defamed by selling books bearing the professors' names, which contained out-of-date and erroneous statements of law. West claims that:

(1) There was no evidence to support the jury's finding of actual malice;

(2) There was no evidence that anyone understood that the book in question was defamatory to the professors; and

(3) The damages were excessive.

To my knowledge, the story is only available on www.law.com, which requires a subscription (and it ain't cheap). I have, however, attached a copy of West's motion here in pdf format: West's Memorandum of Law. West filed this motion with the trial court, which tolls the time during which West can file an appeal to the Third Circuit. (See Fed. R. App. P. 4(a)(4)(A)).

Obviously, I haven't read the transcript of the trial proceedings, but even so, it's difficult for me to believe that West will win. The reason being the legal standard that the trial court must apply to determine whether West's arguments have any merit:

If a party has been fully heard on an issue during a jury trial and the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the party on that issue, the court may:

(A) resolve the issue against the party; and
(B) grant a motion for judgment as a matter of law against the party on a claim or defense that, under the controlling law, can be maintained or defeated only with a favorable finding on that issue.

Fed. R. Civ. P. 50(a)(1) (emphasis added).

Basically, this means that the trial court has to view all the evidence in a light most favorable to the other side (i.e. the professors), and can only set aside the jury's verdict if that evidence is legally insufficient to support the verdict. It does happen, but it's a very high standard nonetheless.

I'm not convinced, however, that the trial court won't reduce the jury's award, and I say this for a couple reasons: First, $5,000,000 is a hell of a lot of money—far more than these professors make in several years (if not their entire careers); and second, the amount is grossly disproportionate to the amount of money that West profited from the books in question.

If the court does reduce the award, it's likely that both sides will appeal, but what often happens is that before the case would be decided by the appellate court, the parties agree to settle the case. This type of settlement often benefits both sides because the plaintiffs—who probably aren't filthy rich, but by the looks of them, aren't getting any younger, and can probably use the money before Brett Favre makes it into the hall of fame and then un-retires—get some compensation much sooner than they would if they wait for all the appeals to play out. And it benefits the defendant because they don't have to spend even more money fighting the case, but at the same time, they get off without paying the professors the full amount owed.

The case of David Rudovsky & Leonard Sosnov v. West Publ'g, No. 2:09-cv-00727-JF is scheduled for a hearing on the motion(s) before U.S. District Judge John P. Fullam on February 10th (pdf of hearing notice).

 

California Court Says E-Mail Not Protected by Attorney-Client Privilege

Posted by joseph bahgat on January 19, 2011

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In an apparent setback for Internet and email privacy, this decision by Cali- fornia's Third Appellate District Court held that an employee's work email was not protected by the attorney–client privilege. Holmes v. Petrovich Dev. Co., LLC (pdf). If there is any upside to this case, the court very clearly based its decision to allow the emails into evidence on the company's written policy, which explicitly stated that company email was not private. In other words, it is unknown whether the California court would have allowed the emails into evidence if the company did not have such a rigid privacy policy.

Last April, the U.S. Supreme Court held that a police officer had no expectation of privacy in personal text messages sent using the department's pager device. See City of Ontario, Cal. v. Quon (pdf). Coincidentally, this case also came out of California, and the Court based its decision, again, on the police department's clearly stated privacy policy.

By contrast, last March, the NJ Supreme Court held that an employee's personal emails were private, despite the fact that the employee accessed those emails from a company computer (e.g., logging into a gmail account from work).

Last month, the Sixth Circuit U.S. Court of Appeals held that email in general is protected by the Fourth Amendment, and that the government could not obtain it from a third-party ISP without a warrant.

Needless to say, the law(s) regarding privacy in everyone's email is very much in flux right now. To protect yourself as an employer, make sure that you have a clear and unambiguous policy con- cerning employee use of company computers, email servers, and even company time. Sometimes it's best to consult with a privacy law attorney to write, rewrite, or review your existing policy and the necessary steps of implementation. To protect yourself as an employee, make sure that you know what your employer's policy is regarding use of company computers, equipment, etc. This is one instance where what you don't know can come back to bite you later.

 

Thanks to attorney David Edelstein for sending me this Wired.com article.

Camera Phones, Copyright Infringement & The Fair Use Doctrine

Posted by joseph bahgat on January 16, 2011

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Apple says the iPhone changed everything. Be that as it may, garden variety cell phone–camera devices have been around about a decade longer than Apple's iconic iPhones, and conceptually speaking, these devices have had a greater impact on our at-large social habits, news, criminal justice system—and even our society—than Steve Jobs could ever dream of. Oftentimes camera phone technology is useful: to thwart criminals, document news or natural disasters in real time, or to preserve evidence for later use in court. But when a majority of people go through their everyday lives armed with cameras at their sides, modern technology sometimes leads to breaking the law, as Nick Bilton wrote in yesterday's New York Times: Phone Cameras May Raise New Copyright Questions.

I won't bother restating what Bilton already has (his article is good, and you should read it), but there are a few legal points that didn't make it into the article that relate to common questions people ask of me, so I thought it would be worthwhile to mention them here. Bilton's predicament started when he was snapping pictures of interior design books at a local bookstore, which he planned to later share with his own interior designer. As any conscientious American might do, Bilton wondered whether his act of photographing someone else's work could possibly be infringing on the authors' copyright(s).

Before we can discuss whether the activity constituted infringement, we have to know exactly what copyright infringement is. The copyright laws are federal, and are codified in Title 17 of the U.S. Code. Therein, copyright infringement is defined as the unauthorized reproduction, dissemination, or derivative use of another's copywrighted work. Pretty broad definition, right?

The penalties for copyright infringement include injunction (a court orders you to discontinue the infringing activity) (§ 502), and monetary penalties, which can be measured by the amount of profit you made from the other person's copyrighted material, or statutory damages, which range from $750 all the way to $30,000 (§ 504). The court also has the authority to award the copyright holder attorneys' fees, on top of damages (§ 505), and in some cases infringement can be criminal (§ 506).

Fortunately, there's a common exception to copyright infringement, known as the Fair Use Doctrine, which provides that it is not infringement to reproduce another's copyrighted material "for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research." (§ 107) The statute also sets forth a four-part analysis to help identify whether allegedly infringing activity is actually fair use:

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

The problem with this test (and with the Fair Use Doctrine in general) is that the analysis is almost entirely subjective; it doesn't give the ordinary person any clear answers as to whether the activity in question is infringement. In Bilton's article, he asked three notable copyright experts, all law professors, about whether his act of photographing pictures from a book qualified as fair use. He couldn't get a clear answer from any of them. Julie A. Ahrens, associate director of the Fair Use Project at Stanford Law School told Bilton: “The core issue here is that you are creating a copy of something rather than buying it. Is it morally incorrect? Maybe. But it entirely depends how much of the book you copy, and what you do with that copy, that would determine if it was illegal.”

The unfortunate reality is that even if you were concerned about your own liability for copyright infringement, and you went to a copyright attorney for advice, even that attorney might not be able to give you a definitive answer. Of course this is not always the case. And it doesn't mean that you should  avoid seeking the advice of a knowledgeable professional. Attorneys know how courts have interpreted specific language from the text of the laws, and oftentimes there are similar fact patterns that the attorney may know of, which have already played out in court. Regardless of the situation, if you're concerned about your own potential copyright infringement, with statutory penalties as high as $30,000, you're better off having a legal opinion than assuming you're in the clear.

"Big Four" Record Companies Headed Back to Court on Price-Fixing Allegations

Posted by joseph bahgat on January 12, 2011

I am the Napster!

Sony BMG, Universal, Warner Bros. and EMI, a/k/a the big four record labels are all headed back to court over price-fixing allegations, after Monday's ruling by the U.S. Supreme Court, denied their petition for certiorari in Sony Music Entertain- ment v. Kevin Starr, No. 10-263. Denying the certiorari petition (this is a fancy term for "request to hear this appeal") has the effect of up- holding the decision being appealed, which in this case was by the Second Circuit Court of Appeals. That court overruled the trial court's order dismissing the case.

The basis of the Second Circuit's decision was that it was sufficient for the plaintiffs to allege facts that suggest a conspiracy, and that the trial court should not have required them to allege facts that ruled out any possibility that the record companies were acting independently.

The irony of this case, however, is that the alleged unlawful conduct occurred back in 2001, i.e., pre-iTunes. Shortly after iTunes' launch, in 2003, the big four record companies' combined 80% ownership of the digital music download market was all but eclipsed.

BCS Has New Home on ESPN; Brennaman Can Take Ted Williams' Old Job

Posted by joseph bahgat on January 11, 2011

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Regardless of whether you liked the teams or the outcome of last night's BCS National Championship game, you have to admit how much better the championship is now that it's back on ABC's family of networks. During the three years that Fox carried the title game, the coverage was dreadful. The production was bad, the audio was bad, and worst of all was the play-by-play coverage of Thom Brennaman.

Brennaman is a baseball guy, the son of long-time Cincinnati Reds announcer Marty Brennaman. Thom also went to Ohio University, which is almost an anti-football college. At some point he started dabbling in NFL games, after Fox picked those up in the late '90s. And then out of the blue, Fox hired him to be the voice of the BCS in 2006. What business did Thom Brennaman have calling bigtime college football games?! Furthermore, what experience did Fox have broadcasting them, and why did they appoint a college football outsider to such a crucial role in broadcasting?

I thought maybe it was just me—that Brennaman rubbed me the wrong way—but apparently not. In the 2009 title game in which #2 Florida beat #1 Oklahoma, 24–14, Brennaman's bias toward Florida QB Tim Tebow was so obnoxious that it drew criticism from the media at-large: "Brennaman was so far over the top in his pro-Tebow hyperbole on Thursday that the game became darn-near unwatchable unless the volume was off," wrote FanHouse's Chris Burke.

Bleacher Report ran a post last week, called BCS: 15 Reasons We're Glad It's on ESPN, Not Fox.

In 2009, we were reminded by Thom Brennaman how great a person Tim Tebow was. He took every opportunity to gloss Tebow as the second coming.

I can only imagine that if Fox had the rights this season, Thom Brennaman would pick a new favorite. We would then be forced to hear how great Cam Newton is or what LaMichael James might be thinking while playing with such talent.

I grew up watching college football on ABC. Dick Enberg, Brad Nessler, Brent Musberger, and of course, Keith Jackson. Jackson's iconic delivery will forever resonate in my ears as the voice of college football. But Jackson notwithstanding, my perception of ABC's sports productions is that they always presented the college game in a dignified manner. Fox, not so much.

Fortunately, Disney (parent company of ESPN, ABC) is doing pretty well, because they were able to pony up half a billion dollars to reclaim college football's January finale ($125M/yr., 2011–14). Fox had been paying about $82M annually for the 4 games it broadcast in each of the 2006–09 seasons. Fox balked at ESPN's offer, and didn't feel they needed to match it because of the fact that ESPN is a cable network, which reaches 16 million fewer viewers than broadcast networks. Being on cable apparently didn't hurt the BCS last night: Its 16.1 Neilsen rating was the highest in the history of cable television, and higher than the 2005 (USC def. Okla., ABC) and 2008 (LSU def. Ohio St., Fox) title games.

Rest assured, beginning with the upcoming college football season, through 2014, ESPN will carry all of the BCS games. Maybe Thom Brennaman can take over Ted Williams' post collecting donations along I-71. On second thought, Williams has a better voice.

Buckeyes' Consequences, Part II: What is a Contract?

Posted by joseph bahgat on January 07, 2011

Many people believe that a contract has to be in writing, or it's not a contract. Not true. Another common mis-perception is that a contract is a document or tangible piece of paper. Also not true. Although contracts are oftentimes written, the contract is the actual agreement itself, and not the paper it's written on, per se. True, the law does require that certain types of contracts be in writing to be enforceable (this isn't one of them), the lack of a written agreement will not prevent most other contracts being enforced. One caveat, however, is that without a written record of an agreement, it is oftentimes difficult to prove that the agreement's existence in the first place, much less the agreement's terms, so in that case, failure to have a contract in writing would serve as a barrier to enforceability.

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Generally speaking, a valid contract has three requirements:

(1) An offer;

(2) Acceptance;

and

(3) Consideration (this is just a fancy word that means that the parties have to exchange, or promise to exchange something of value).

In the circumstances with the suspended Buckeyes (see Consequences, Jan. 5), Coach Tressel offered to let them play in the Sugar Bowl if the players promised to return to the team in 2011 (and not go to the NFL). The players accepted. The consideration is the players' promise to forgo the NFL draft this spring, and to serve whatever suspension the NCAA passes down.

In this case, there wouldn't be much difficulty proving that the players and the coach made this agreement: Tressel went on national TV and discussed the deal in detail, and none of the players spoke up to object (this is known as a tacit agreement). Furthermore, members of the media asked some of the players, directly, about their promise(s) to return to Ohio State next year, to which the players each gave an affirmative response.

Breach of contract occurs when one party doesn't honor his contractual obligation. In reality, people breach contracts everyday, but it doesn't always make sense to sue. There are two reasons for this:

(1) Even if you successfully prove that the other party breach the contract, you are only entitled to the damages that you can prove (In other words, the court won't award you a lot of money simply because the other guy acted like a douchebag.);

(2) Regardless of whether you win or lose your contract case, in almost every circumstance you will still have to pay your own attorney. So unless your damages are significant, and you're pretty sure you can prove them, it might not be worth it to file suit.

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Turning back to the Buckeyes' promise to return in 2011—if the players reneged, and Ohio State sued them, what are the university's damages? This is what attorneys refer to as speculative damages. But for the sake of argument, let's suppose that Ohio State claims that the players' breach caused the university to lose millions in lost ticket sales, endorsements, and broadcast royalties. The players would counter by saying that if they hadn't played in the Sugar Bowl, Ohio State would've lost, and they would've lost even more than what they lost as a result of the players' breach. And they'd be right.

As Rob Oller pointed out, what would an NFL team think about a player who reneges on a promise to his school under those kinds of circumstances?

Consequences if Buckeyes Break Promise to Return

Posted by joseph bahgat on January 05, 2011

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Last night, the Ohio State Buckeyes beat the Arkansas Razorbacks 31–26 in the Allstate Sugar Bowl. The games's MVP was junior quarterback Terrelle Pryor, who, along with four other Buckeyes, was suspended by the NCAA on Dec. 23, 2010 for allegedly receiving improper benefits (NCAA Press Release pdf). The so-called improper benefits were cash proceeds from the sale of memorabilia items, including their Big Ten Championship rings, which the five players admitted to selling, for between $1000 and $2500.

But because the NCAA found that "it was reasonable at the time the student-athletes were not aware they were committing violations," a loophole in the rules allowed all five Buckeyes to play in the upcoming bowl game. "The policy for suspending withholding conditions for bowl games or NCAA championship competition recognizes the unique opportunity these events provide at the end of a season, and they are evaluated differently from a withholding perspective."

ESPN-nation erupted, over what the public perceived as the NCAA giving Ohio State preferential treatment. Then, on Dec. 30—the day after the Buckeyes returned from their 4-day x'mas break—Jim Tressel announced that he had requested verbal commitments from each of the suspended players, to return for their senior seasons at Ohio State if allowed to play in the Sugar Bowl. All five players agreed, which seemed to quiet much of the public outcry. Columbus Dispatch's Rob Oller called Tressel's move, "a masterful flanking maneuver that puts him back in charge and quiets critics who have questioned his leadership."

But Tressel's deal didn't satisfy everyone; the new topic du jour was speculation over whether those five players would actually keep their promises to return. Critics argued that if they decided not to honor their promises, and instead declared for the 2011 NFL Draft, then those players wouldn't have to suffer any consequences for their impermissible conduct. Oller even referred to the players' agreement as "nonbinding." Although I believe it would be a supreme waste of time to, say, try to enforce the players' promises using judicial means—not to mention, a public relations nightmare—I wouldn't be so quick to dismiss the players' promises as nonbinding.

Some will inevitably refer to Jim Tressel's gentleman's agreement as his deal with the devil, especially given the way all five players contributed immensely to the Buckeyes' Sugar Bowl win. Prior to last night, the Buckeyes had a 32-year winless streak against SEC football teams in bowl games. This morning, I bet that some of those same fans who criticized Tressel for his deal, are silently rejoicing.

Next—Part II: What is a contract?