Ad Astra Law Group, LLP

Ninth Circuit Opinion Confirms That Websites Should Probably Have Clickwrap Agreements To Bind Their Customers

Written by Keenan W. Ng

Recently, the Ninth Circuit in Nguyen v. Barnes &Noble, Inc. held that “where a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on—without more—is insufficient to give rise to constructive notice.”

In 2011, plaintiff purchased two Hewlett-Packard Touchpads from the Barnes & Noble website during a fire sale. Unfortunately, despite receiving a confirming email of his purchase, plaintiff’s order was cancelled due to high demand. Plaintiff filed suit alleging he had to purchase another tablet at a higher price. Defendant argued that plaintiff must arbitrate the matter per the browsewrap terms of use agreement.

Congress Readies Itself to Tackle Cybersecurity Legislation

Written by Keenan W. Ng

With Congress coming back from its summer recess, it will be focusing on a few cybersecurity related bills. One of the most controversial of these bills is the Cybersecurity Information Sharing Act of 2014 (“the Act”), introduced by Senator Dianne Feinstein (D-CA) and Senator Saxby Chambliss (R-GA) for the fourth consecutive year. The Act is supposed to “improve cybersecurity in the United Sates through enhanced sharing of information about cybersecurity threats, and for other purposes.” While some of the ideas and the language behind the Act seem reasonable and commonsense, the devil is in the details- or rather, the definitions in the Act- and could have some very interesting implications for individuals and businesses.

Ninth Circuit Affirms That Yelp! Can Use Hardball Sales Tactics To Sell Advertising To Businesses

Author: Scripta Ad Astra Staff

On Tuesday, the Ninth Circuit affirmed a district court ruling in Levitt v. Yelp! Inc. dismissing an action by a group of small businesses that Yelp! extorted, or used extortionate sales tactics, to induce small businesses to purchase advertising with Yelp! in violation of the federal Hobbs Act (civil extortion) and the California Unfair Competition Law. The plaintiffs generally claimed that Yelp! sales people contacted them about purchasing advertising services in connection with their Yelp! pages. When the plaintiffs declined to purchase the advertising, the plaintiffs alleged that Yelp! manipulated its service to lead to a downgrade in the businesses ratings. The plaintiffs alleged that such tactics included removing positive reviews, re-posting negative reviews that had previously been taken down, allowing more negative reviews to appear first, and even authored negative reviews.

Ninth Circuit Finds That FedEx Drivers Are Employees and Not Independent Contractors

Author: Scripta Ad Astra Staff

An interesting opinion in Alexander v. FedEx came out of the Ninth Circuit on Wednesday holding that FedEx drivers and delivery people were improperly classified as independent contractors instead of employees because of the level of control that FedEx maintains over those drivers. I find the opinion “interesting” because I never would have thought the people driving in the FedEx branded trucks, FedEx branded uniforms, using FedEx technology, delivering packages to FedEx customers in areas designated by FedEx, on FedEx’s schedule, would have been classified as anything other than an employee.

Federal Judge Rules Against NCAA In Antitrust Lawsuit

Author: Wendy Hillger & Scripta Ad Astra Staff

It has been a little over a week since U.S. District Judge Claudia Wilken of the Northern District of California issued her August 8, 2014 landmark ruling against the National Collegiate Athletic Association (“NCAA”) in O’Bannon v. NCAA. While it is too early to know the ramifications of the ruling (the NCAA has already stated it will appeal), the opinion has roundly been seen as favorable for collegiate athletes.

How The Challenge Started
The road to get to this ruling did not start with the lead plaintiff, former UCLA basketball star, Ed O’Bannon, simply filing suit. Rather, Mr. O’Bannon stood on the accomplishments of an evolution in public opinion and challenges that chipped away at the NCAA’s “defense of amateurism”.

The challenge to NCAA’s reign was, in part, started by the very man who helped commercialize college sports, Sonny Vaccaro. After spending decades building endorsement relationships between shoe companies such as Nike, Adidas, and Reebok, with universities all over the country, Mr. Vaccaro eventually soured on what he saw as colleges taking advantage of athletes. While universities and the NCAA were making money hand-over-fist from merchandising, television rights, and other endorsement deals, they were withholding those revenues from the athletes (called “student-athletes” by the NCAA for the purposes of avoiding paying workers compensation insurance), suggesting that these athletes were playing as students and amateurs, not professionals, and thus not entitled to that money.

S.D.N.Y. Affirms Order To Microsoft To Hand Over Data Stored Overseas Pursuant To A Stored Communications Act Warrant

Author: Scripta Ad Astra Staff

On Thursday, July 31, 2014, Microsoft lost a challenge to an April 25, 2014 order denying its motion to quash a subpoena issued by the federal government pursuant to the Stored Communications Act (“SCA”) for email communications located on Microsoft servers in the Ireland. Issuing her ruling from the bench, U.S. District Judge Loretta Preska stated that “Congress intended in this statute for ISPs to produce information under their control, albeit stored abroad, to law enforcement in the United States … As [Magistrate Judge James Francis IV] found, it is a question of control, not a question of the location of that information.”

Luckily for Microsoft, Judge Preska stayed the implementation of her ruling so that Microsoft could appeal to the Second Circuit. While we wait for that to occur, it might be worthwhile to go back and examine what Judge Francis’ April 25, 2014 Order said.

Congressman Darrell Issa Not Happy With The Federal Trade Commission Taking Action Against LabMD For Data Security Breaches

Author: Scripta Ad Astra Staff

On Thursday, July 24, 2014, Congressman Darrell Issa (R- CA 49), Chairman of the House Oversight Committee, held a hearing on the Federal Trade Commission’s prosecution of LabMD for alleged data security breaches leading to the release of its customer’s personal data. Needless to say, Congressman Issa was not happy with the FTC.

Background of FTC v. LabMD
On August 28, 2013, the FTC filed an administrative complaint against LabMD alleging a variety of data security breaches that lead to the release of consumer information. LabMD conducts clinical laboratory tests on specimen samples from consumers and reporting test results to consumers’ health care providers.
Read More >

NSF Funds New UCLA Cybersecurity Research Center and Other News

Author: Scripta Ad Astra Staff

NSF Funds New UCLA Cybersecurity Research Center
In news not necessarily related to the law, UCLA just announced that it is starting a cybersecurity research center, thanks to a grant by the National Science Foundation. The Center for Encrypted Functionalities opened on Thursday, July 31, 2014, and is funded by a five-year, $5 million grant from theNSF’s Secure and Trustworthy Cyberspace program. The center is a collaboration among researchers at UCLA, Stanford University, Columbia University, the University of Texas at Austin and Johns Hopkins University. As a proud alumnus, I am happy to hear that UCLA is taking a leading role in developing cybersecurity solutions.

2014 ABC Desk Guide

The Insolvency Law Standing Committee of the Business Law Section of the State Bar of California recently published the “2014 ABC Desk Guide,” coauthored by Anne Smiddy of Ad Astra Law Group LLP. Ms. Smiddy co-authored the Desk Guide with Patrick Costello, Esq. of Vectis Law Group, Diana Donabedian Herman, Esq. of McKenna, Long, Aldridge LLP, and Justin E. Rawlins, Esq. of Winston & Strawn LLP, with Peter C. Califano, Esq. of Cooper, White & Cooper as editor. The Desk Guide provides a convenient compilation and outline of the relevant state and federal statutes and cases affecting the operation of assignments for the benefit of creditors under California law. The practice guide is available for purchase from the State Bar of California.

Ad Astra Law Group, LLP

Opinion Roundup: California District Courts and the Computer Fraud and Abuse Act – January 2014 through June 2014 – Part Three

Author: Scripta Ad Astra Staff

This is the third part of three part-series on federal district court opinions in California regarding the CFAA. The first part of this series can be found here. The second part of this series can be found here.

Overall, California district courts have regularly followed the holdings in Nosaland Brekka regarding “use” versus “access.” In summary, courts in the Ninth Circuit have generally held that the CFAA does not prohibit misusing information, such as in a trade secrets misappropriation violation: if you are allowed to access information, what you do with that information is not a violation of the CFAA, even if it is contrary to the interests of your employer. On the other hand, if were not allowed to access information – say you quit or were fired – then a CFAA claim could likely withstand Ninth Circuit scrutiny.

It will be interesting to see how the courts make their decisions, especially as the divide between employment-based CFAA claims (“inside hacker” claims) and non-employment-based (external “hacker” claims) become more prevalent. Of course, you can always come back to Scripta Ad Astra to read about the latest CFAA, computer crimes, and cyber security developments.

NetApp, Inc. v. Nimble Storage, 2014 U.S. Dist. LEXIS 65818 (N.D. Cal. May 12, 2014)
Judge: Lucy H. Koh, United States District Judge.