Website’s Browsewrap Agreement Inconspicuous and Unenforceable

Brett Long, a California resident, bought Mother’s Day flowers for his mother, living in Kansas, from ProFlowers.com.  Long thought he was buying a completely assembled bouquet, but the flowers arrived as a do-it-yourself-kit.  Long filed suit in California state court against Provide Commerce, Inc., an online retailer and owner of ProFlowers.com.  Long alleged violations of California state statutes and sought to bring a class action. 

Provide moved to compel arbitration, arguing that Long was bound by the ProFlowers.com Terms of Use, which required arbitration.  The trial court ruled that the hyperlinks on the ProFlower.com website were too inconspicuous to put a reasonably prudent Internet consumer on inquiry notice.  On appeal, the Court of Appeal agreed with the trial court.

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Posting Facebook Threats Criminal Violation Requires Awareness of Wrongdoing

Anthony Douglas Elonis tested the limits of what content he could lawfully post on Facebook.  He was convicted for threatening patrons and employees of the amusement park where he was formerly employed, his estranged wife, police officers, a kindergarten class and an FBI agent through his violent music inspired Facebook posts.  18 U.S.C. §875(c) makes it a federal crime to transmit communications containing threats to injure another person through interstate commerce.  A Facebook post is a communication made through interstate commerce, an assumption that was not at issue in this case.

The district court allowed a jury instruction that

A statement is a true threat when a defendant intentionally makes a statement in a context or under such circumstances wherein a reasonable person would foresee that the statement would be interpreted by those to whom the maker communicates the statement as a serious expression of an intention to inflict bodily injury or take the life of an individual.

The Third Circuit Court of Appeals agreed with the jury instruction and upheld the conviction.

What, if any, mental state must a defendant have to be convicted for making threats under 875(c)?  That was the question before the U.S. Supreme Court.

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No Time Lag Allowed in Crediting Electronic Mortgage Payment

When a consumer makes a mortgage payment online, should the mortgage servicer be required to credit the electronic payment on the day the consumer authorizes the payment?  Elena Fridman’s mortgage payment to NYCB Mortgage Company, LLC (NYCB), her mortgage servicer, was due on the first day of each month.  She had a 15 day grace period in which to pay the mortgage before incurring a late fee.  She authorized NYCB to electronically transfer funds from her Bank of America checking account to pay her December 2012 mortgage on Thursday, December 13, 2012, after the 8:00 pm EST cutoff time.  NYCB, following its policies, did not credit Fridman’s mortgage account until Tuesday, December 18, 2012.  NYCB charged Fridman an $88.54 late fee.  Fridman sued NYCB, alleging violation of the Truth in Lending Act (TILA), 15 USC §1639f(a).

Fridman argued that the TILA requires mortgage servicers to credit electronic payments on the day the consumer authorizes the payment.  NYCB argued that electronic payments should be credited when the mortgage servicer receives the funds from the consumer’s external bank account.  The district court agreed with NYCB and granted NYCB’s motion for summary judgment.

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Barnes & Noble Browsewrap Terms of Use Get Torched

Barnes & Noble, a bookseller with both an online presence and brick and mortar stores, tried to unload discontinued Hewlett-Packard Touchpad tablet computers through its website.  Barnes & Noble underestimated the demand, resulting in its cancellation of Kevin Khoa Nguyen’s order of two Touchpads.  Nguyen was forced to purchase substitute technology at a higher price.  Nguyen brought a class action suit against Barnes & Noble, alleging deceptive business practices and false advertising under both California and New York law. 

Barnes & Noble argued that its website’s Terms of Use required Nguyen to arbitrate his claim.  The district court ruled that Barnes & Noble did not provide reasonable notice of its Terms of Use to Nguyen and that Nguyen did not unambiguously consent to the arbitration provision.  The Ninth Circuit Court of Appeals agreed.  Website owners cannot rely on Terms of Use hyperlinks posted at the bottom of the page and near the checkout button to put consumers on notice of the content of the Terms of Use.

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Business Owner Gives Yelp Something to Yelp About

I periodically hear business owners complain about Yelp and their inability to get negative reviews off of the Yelp website.  James Demetriades is a business owner who bought advertising on Yelp.  Demetriades believed that Yelp’s filters allowed false statements about some of his restaurants into the reviews section, while excluding positive reviews about Demetriades’ restaurants.  Yelp did not remove the false statements in the reviews after Demetriades reported them to Yelp.  Demetriades sued Yelp in California State court.  Demetriades alleged that the statements Yelp made about its filter were misleading and untrue and alleged Unfair Competition Law and False Advertising Law violations.

Yelp claimed that both its process in posting reviews on its website and Yelp’s statements about its review filtering process are protected free speech rights.  Yelp also claimed that its posting process and its statements about its review filtering process are protected by its right to make targeted speech appearing in a public forum and that its speech concerns a matter of public interest.  The trial court agreed with Yelp and dismissed Demetriades’ case.  The Court of Appeals reversed.  Since this is a California case applying California law, the court’s ruling will not apply to the law of every state.

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Dissed Thomas M. Cooley Law School Gets No Satisfaction from the Sixth Circuit

Attorney David Anziska made statements about the Thomas M. Cooley Law School, some of which were posted on the Internet and some of which were alleged in a complaint.  Thomas M. Cooley Law School sued Anziska and his firm for the state law claims of defamation, tortious interference with business relations, breach of contract, and false light.  Strangely, no allegations of wrong doing were made about my favorite statement by Anziska:  “These schools are preying on the blithe ignorance of naive, clueless 22-year-olds who have absolutely no idea what a terrible investment obtaining a JD degree is. Perhaps one of the worst offenders is the Thomas Cooley School of Law, which grossly inflates its post-graduate employment data and salary information.”  (Opinion pdf page 2).  Looking back at myself as a K through JD, I was definitely naïve and clueless at age 22.  That didn’t stop me from going back for my IP LL.M. years later.  Silly me.

The district court granted summary judgment in favor of Anziska and the other defendants.  The district court determined that Thomas M. Cooley Law School was a limited-purpose public figure and that no reasonable jury could conclude that Anziska published the statements with actual malice.  The Sixth Circuit Court of Appeals affirmed.

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Not All Statements in eBay’s User Agreement Are Binding Promises

The Ninth Circuit Court of Appeals recently ruled that eBay’s User Agreement contains both informal descriptions of how eBay’s system works and legally enforceable promises.  Marshall Block, an eBay seller, filed a lawsuit against eBay.  Block argued that eBay’s Automatic Bidding system violates two statements made by eBay in its User Agreement.  eBay’s Automatic Bidding system automatically enters bids on behalf of the bidder until the maximum set by the bidder is reached. 

No federal law issues were involved in this case.  The federal court system exercised diversity jurisdiction, which occurs when the plaintiff pleads greater than $75,000 in damages and does not share state citizenship with any defendant.  The Ninth Circuit applied California state contract law to decide the case. 

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