Court Affirms Denial of Motion to Dismiss, Says AOL’s Forum Selection Clause Does Not Apply
by Lauren Gelman, posted on March 9, 2004 - 10:48pm
Robert Pasieka sued America Online (“AOL”) in a class action on behalf of consumers who subscribed to AOL’s online services. The complaint described subscribers’ difficulty in canceling these services, as well as continued billing after cancellation, and alleged the use of deceptive and unfair methods with
respect to subscription efforts and customer retention practices. Pasieka filed the suit in Florida state court, making claims under the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”) and the Florida Free Gift Advertising Law (“FFGAL”).
AOL moved to dismiss the action for improper venue, arguing that the AOL Member Agreement provided for exclusive jurisdiction in the courts of Virginia of “any claim or dispute with AOL or relating in any way to … membership or … use of AOL ….” The trial court denied this motion, and AOL appealed.
Tenth Circuit Upholds the Constitutionality of the National Do-Not-Call Registry
by Lauren Gelman, posted on March 9, 2004 - 10:46pm
Federal Trade Commission (FTC) and Federal Communications Commission (FCC) regulations prohibit most commercial telemarketers from calling numbers on the national do-not-call registry. Telemarketing companies challenged the regulations in the District of Colorado and the Western District of Oklahoma. Both courts struck down the do-not-call registry. The Colorado court held that the regulations violated the First Amendment, and the Oklahoma court held that the FTC lacked statutory authority to enact the registry rules. The appeals were consolidated and tried before the Tenth Circuit Court of Appeals. The court reversed the decisions of the district courts and held that, inter alia, the do-not-call registry’s restrictions on commercial speech do not violate the First Amendment.The court applied a three-prong test to determine whether the do-not-call registry is a constitutional restriction on commercial speech. First, the government must have a substantial interest that justifies the regulation. Second, the regulation must directly advance the governmental interest. And third, the regulation must be narrowly tailored so that it does not restrict more speech than is necessary in pursuit of the governmental interest. With regard to the first prong of the test, the court found that the do-not-call registry addresses two governmental interests: (1) an interest in protecting the privacy of individuals in their homes and (2) an interest in protecting consumers from abusive and coercive solicitation.
Ninth Circuit Finds Triable Issue Regarding AOL’s Qualification for DMCA’s Safe Harbor Provision
by Lauren Gelman, posted on March 9, 2004 - 10:45pm
On February 10, 2004, the Ninth Circuit affirmed in part and vacated in part the district court decision that granted America Online, Inc. (AOL) summary judgment in a copyright infringement suit. The district court had found that AOL qualified for the Digital Millennium Copyright Act (DMCA) safe harbor limitation of liability under 17 U.S.C. § 512(a). The Ninth Circuit ruled that the district court had improperly granted summary judgment for AOL when there was a triable issue of fact as to whether AOL had properly met the requirements for DMCA’s “safe harbor” for Internet service providers.Science fiction author Harlan Ellison filed suit against AOL based upon Stephen Robertson’s posting of his copyright-protected short stories to a peer-to-peer file-sharing network, the USENET news-group. The unauthorized digital copies of copyrighted works were temporarily stored and retained on AOL’s servers. Ellison alleged that AOL was liable for copyright infringement under either direct or vicarious liability and/or contributory infringement. AOL moved for summary judgment on the grounds that no reasonable trier of fact could conclude from the evidence that it was liable for copyright infringement, and that it qualified for one of the four safe harbor limitations of liability under Title II of the DMCA. Although the district court found there to be triable issues of material fact concerning Ellison’s contributory infringement claim, the court nonetheless granted AOL’s motion for summary judgment based on the safe harbor provision.
California Court of Appeal Upholds Video Surveillance Obligation for Cyber Cafes
by Lauren Gelman, posted on March 9, 2004 - 10:44pm
In response to the growing number of cyber cafes in the city and an increase in crime associated with these cafes, the city council of the City of Garden Grove adopted an ordinance which, among other provisions, required cyber cafes to install a video surveillance system that would record and playback the activity and physical features of persons or areas within the premises, as well as all entrances and exit points and all interior spaces, excepting bathroom and private office areas. The system would be subject to inspection by the city during business hours and the videotape had to be maintained for a minimum period of 72 hours. Cyber cafe owners challenged the ordinance, arguing that this video surveillance requirement infringed free speech and privacy rights protected by the First Amendment and Art. I, §§1 and 2 of the California Constitution.
NY Ban on Online Advertising of Wine Sales Upheld
by Lauren Gelman, posted on March 9, 2004 - 10:43pm
Section 102(1) of New York’s Alcoholic Beverage Control Law prohibits the direct sale of alcoholic beverages to consumers within the state by entities not having physical presence in the state. Plaintiffs Swedenburg and Lucas are proprietors of wineries located outside of New York; these wineries sell their products over the Internet. Plaintiffs contended that the prohibition of out-of-state wineries from selling wine directly to New York state consumers, while permitting in-state wineries to make such sales, violated the Commerce Clause, as well as the Privileges and Immunities Clause of the Fourteenth Amendment. In addition, plaintiffs argued that the statute violates the First Amendment rights by subjecting to misdemeanor liability any person who sends advertising information about alcoholic beverages into the state, including over the Internet.The district court granted plaintiffs’ motion for summary judgment, finding that the New York regime directly discriminated against interstate commerce. It said that it was unreasonable for the State to require an out-of-state winemaker to become a resident in order to compete on equal terms. Moreover, it recognized the technological advancements which facilitate commerce between and among the states and the increasing role of the Internet for the direct sale and shipment of goods to consumers.
Summary Judgment Granted to Movie Studios in new DMCA case
by Lauren Gelman, posted on March 9, 2004 - 10:41pm
The District Court for the Northern District of California granted the summary judgment petitioned for the movie industry’s representatives in the case of 321 Studios v. Metro Goldwyn Mayer Studios Inc., et al. This decision comes from a suit filed by 321, seeking a declaratory judgment as protection from the assertion by movie studios of claims under the anti-circumvention provisions contained in §1201 of the Digital Millennium Copyright Act.321’s Claims
321 sought protection from all three forms of application of §1201, namely those forbidding the anti-circumvention of electronic protection measures, as well as trafficking in such and marketing them. In so doing, it submitted that (i) its activities in distributing to programs that allow for copying of DVDs don’t violate provisions of §1201 of the DMCA, or (ii) that such provisions are invalid in light of other copyright law provisions, (iii) that Congress exceed its enumerated powers under the copyright clause of the Constitution, (iv) that said provisions are unconstitutionally vague, and/or (v) that they violate the First Amendment of the Constitution.
by Lauren Gelman, posted on March 9, 2004 - 10:39pm
This case arose after two Fairfield, Connecticut police officers faxed a Search and Seizure Warrant Application to American Online requesting personal information about a user alleged to have sent an obscene or harassing email. The warrant application did not bear a judge’s signature, nor was an actual warrant form ever filled out or submitted for judicial approval. Therefore, the document was legally void. Still, AOL provided one of the officers with the Plaintiff’s name, address, phone numbers, account status, membership information, other AOL screen names, and software, billing, and account information. The Plaintiff brought various privacy-related statutory, contract, and state and federal constitutional claims against one or more of the Defendants: the police officers, the Town of Fairfield, and AOL. He filed a motion for summary judgment against the police officers and the Town of Fairfield for violation of the Electronic Communication Privacy Act of 1986 (“ECPA”). The ECPA requires that government entities comply with specific, proper legal process or obtain consumer consent before requesting information from internet service providers (“ISPs”). 18 U.S.C. § 2703(c)(1).