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FMG Law Blog Line

Archive for April, 2014

Yelp Lawsuits Signal Rise in Internet Defamation Cases

Posted on: April 30th, 2014

By: Matt Foree

The ubiquity of social media and internet communications has drastically increased the opportunities for defamation.  The spread of defamatory statements to countless individuals is often as easy as pushing a button.

Recent defamation cases regarding user review websites, including Yelp, indicate that such lawsuits are on the rise.  For example, a Virginia case involving a homeowner’s negative review of a general contractor on Yelp went to a jury trial earlier this year.  Although the jury found that the homeowner had defamed the contractor, it awarded no damages, because it found that the contractor had also defamed the homeowner on Yelp in retaliation.

In another case that has garnered national attention and the interest of free speech advocates, a Virginia Court of Appeals recently ordered Yelp to reveal the identity of anonymous negative reviewers in a suit brought by a carpet cleaning company.  The company alleged that the reviews were false and posted by individuals who were not actually customers and that its business suffered by 30% as a result of the negative reviews.  The company requested that Yelp identify the anonymous reviewers, but Yelp refused, claiming the reviewers’ speech was protected by the First Amendment.  This case has been appealed to the Virginia Supreme Court.

Businesses would do well to handle negative on-line reviews on a case by case basis, as tactless and overbearing responses to moderately negative reviews can often create additional negative publicity.

If you believe your business is the victim of a false review, contact us to prepare the best strategy for dealing with it.

A Picture is Worth a 1000 Words

Posted on: April 30th, 2014

By: Seth Kirby 

In the ever evolving world of marketing through social media, companies strive for ways to drive traffic to their virtual doorsteps.  The constant question running through the mind of a person tasked with internet marketing is “what can I post that will interest my target demographic?”  The desire to answer this question, coupled with the ease of posting to social media, generates some very creative, and often ill-advised posts.  One of the most recent examples of an ill-advised post has been provided by the social marketing team at Duane Reade drugstores.

In an attempt to engage their followers and increase the “cool factor” of shopping in their stores, Duane Reade tweeted a link to a paparazzi photo of actress Katherine Heigl.  The photo showed Ms. Heigl leaving a Duane Reade store carrying a couple shopping bags.  Accompanying the link, the tweet read “Love a quick #DuaneReade run? Even @KatieHeigl can’t resist shopping #NYC‘s favorite drugstore.”  At first blush, this tweet may appear to be a great use of the medium, generating buzz for the brand by showing that the store is poplar with a celebrity.  There is just one problem, while the tweet may have generated some social media buzz for Duane Reade, it definitely generated a lawsuit against the company.  Within a month of the tweet, Katherine Heigl filed a lawsuit against Duane Read claiming that the tweet invaded her right of privacy and publicity and “exploit[ed] Ms. Heigl’s image for commercial gain.”  Ms. Heigl is seeking $6 million in damages for these alleged violations.  It is safe to assume that Duane Reade’s marketing team did not set out to embroil the company in litigation with their pithy observation.  Unfortunately, that is exactly what their social media marketing effort has done.

So what can we learn from this case study?  If you are a business using social media to market your company, be mindful of the potential consequences of your posts.  As demonstrated by the Heigl matter, it would be prudent to get the permission of your customer before you use his or her image to promote your business.  Consider whether the statement that you are about to make could be considered libelous, an implied warranty regarding your goods or services, or misleading.  Of course, in order to consider the potential consequences of your social media posts, the person or persons in charge of posting to your social media accounts should be a trusted employee that has been trained regarding the use and pitfalls of social media.  While the new college intern may have a great sense of what will generate buzz on the web, he may not the best person to determine the appropriateness of your posts.  Supervision and training can be valuable tools to mitigate the serious risks posed by social media marketing.

With regard to risk mitigation, businesses and insurers must realize that the use of social media as a marketing tool is evolving and perilous.  Innocent attempts to generate buzz can and will be viewed as actionable torts.  Traditionally, Ms. Heigl’s suit would be entitled to coverage under a commercial general liability policy as a suit seeking damage for advertising injury.  Many current polices, however, may seek to exclude coverage for “cyber liability” exposures.  Undoubtedly, the wording of such exclusions will be subject to great scrutiny in the coming years, but if they validly exclude advertising injury claims arising from the use of social media, then many business may not be adequately protected for the risks posed by their use of social media.  Obtaining a policy specifically tailored to cyber liability exposures may be the best solution.

Total Medical Malpractice Payout Amounts Up Nationwide in 2013

Posted on: April 30th, 2014

By: Michael Eshman  

Diedrich Healthcare published a graphic analysis of medical malpractice payouts in 2013 based on numbers recorded by the National Practitioner Data Bank.  The numbers reveal an uptick in medical malpractice payout amounts nationwide for the first time since 2003.  Diagnosis related claims remained approximately one-third of total payout amounts.  The graphic analysis provides a great overview of the trends nationwide and by state. The U.S. Department of Health and Human Services provides the hard data behind this analysis and is a helpful resource to anyone with more specific questions with respect to medical malpractice claims trends within specific states.

Cell Phone Searches: The Next Battle Regarding the Fourth Amendment

Posted on: April 29th, 2014

By: Wayne S. Melnick 

On Tuesday, April 29, 2014, the United States Supreme Court heard argument focused on a question that is being closely watched by many and has the potential to affect a great portion of the United States population: do police officers have the right to make a warrantless search the contents of a person’s cell phone subsequent to that person’s lawful arrest?  The implications of the court’s ruling on this issue are great and will likely be the foundation of computer-based search and seizure law for many upcoming years.

In the cases before the Court, United States v. Wurie (Case Number 13-212) and Riley v. California (Case Number 13-132), the Court is essentially faced with the same question: was it proper for the authorities at issue to search the contents of the arrestee’s cell phone after that person had been properly placed under arrest?  The answer to this question is largely going to depend on the factual basis that is used to justify the search.

Historically, the Supreme Court has developed various exceptions to the constitutional right providing for prohibition against warrantless searches.  Chief among these has been to prevent physical danger to the officers or to prevent the destruction of evidence.  The main problem with this justification is that neither is present regarding digital evidence where there is no danger of the immediate destruction of the evidence.  Obviously, an officer is not going to be hurt by the data (as (s)he might be with a gun or a knife), and if the data has properly been taken into custody and kept separate from the perpetrator, there is no real danger of destruction of the evidence absent the government’s stated concern of “remote data wiping.”  Pretermitting that, the officer certainly can otherwise move quickly to obtain a lawful warrant for the search.

A cell phone is not really just a “phone” anymore.  Today’s smartphones are actually computers with the capability to make calls.  To simply allow the government to do a complete search of person’s cell phone (or restated their “pocket computer”) would be a dramatic and, in this author’s opinion, uncalled-for expansion of the government’s power and a threat to personal privacy.

The bottom line is that I expect the Court will issue new rules related to digital data that are different from the bright-line rules associated with physical evidence and at the same time not allow for a blanket “free-pass” for the government to make these warrantless searches every time a cell phone is taken into custody.  One possibility is that the Court holds that the police can seize the phone but cannot search it incident to arrest absent exigent circumstances.  Alternatively, the Court could hold that police can seize the phone and can search it in at least some circumstances, such as when there is reason to believe that there is evidence of the crime for which the person was arrested in the phone.  If the latter is chosen, it opens up even larger cans of worms related to what the police can do with the digital evidence found on the phone that is unrelated to the crime for which the perpetrator was arrested but could be incriminating of other, up-to-that-point unknown crimes.

What those rules will be will not be known when the court rules – expected to be in June.

H1B Visas: Do You Want the Good News or the Bad News?

Posted on: April 29th, 2014

By: Kelly Eisenlohr-Moul

I’ll lead with the bad news: while Congress stalls on immigration reform, the United States Customs and Immigration Services received 172,500 H1B petitions between April 1 and April 5, 2014!

This means that, over a five-day period, USCIS received twice as many petitions as slots available.  H1B hopefuls and their employers must now wait until 2015 to apply/reapply in this category.

Perhaps in response to this over-subscription, the White House announced on April 7 that the Department of Homeland Security would “soon” publish several proposed rules designed to make the United States more attractive to foreign entrepreneurs and highly-skilled immigrants.

While the White House did not elaborate on all of the proposed changes, it did state that one of the rules would authorize employment for spouses of certain highly-skilled workers, such as those in the H1B category.

This is a huge positive development for H1B recipients, as well as their spouses.  Currently, H1B spouses may accompany their husband or wife to the United States, but are prohibited from working unless they qualify for a visa independently.