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.

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A Case of Mistaken Identity

Author: Katy M. Young

Nearly every entrepreneur has fretted over selecting a name for her business. Once selected, enormous amounts of resources are dedicated to building a brand behind that carefully selected name. Some savvy business owners even go so far as to obtain trademark protection for the name of their business and the goods or services they offer. But what happens when even the most conscientious entrepreneur is faced with unscrupulous competition in the marketplace in the form of a similar business that insists upon using your name? Trademark lawyers can add another real risk to the parade of horribles that can occur when there is marketplace confusion over a business name: wrongfully being named in a lawsuit. Behold the story of mistaken identity, and how Ad Astra took care of the problem quickly and inexpensively.

Ad Astra’s client is a consulting business in Oakland, we’ll call them ABC, Inc. for the purpose of this story. ABC, Inc. registered a trademark for its name for the provision of  consulting services. After some time, another business called ABC Partners, which sometimes went by the name ABC Brokerage, started offering similar services, but in Southern California instead of Northern California. ABC, Inc. sometimes gets phone calls for people trying to reach ABC Partners/Brokerage, and at one point, ABC Partners/Brokerage copied ABC, Inc.’s website and used it as their own! ABC, Inc.’s trademark lawyers have written letters to ABC Partners/ABC Brokerage demanding that they stop using the name “ABC,” but they haven’t had the money to bring a trademark infringement lawsuit.

As if the confusion in the marketplace weren’t bad enough (i.e. phone calls for one business going to the other), ABC Partners/ABC Brokerage became involved in an allegedly illegal medical cannabis dispensary in Upland, California and when the City of Upland sued to shut down the dispensary, it named ABC, Inc. as a defendant right along with ABC Partners and ABC Brokerage!  Even being named in a lawsuit that you had nothing to do with can be devastating to a business because of the high cost of participating in litigation.

As ABC, Inc.’s General Counsel, Katy Young called the City Attorney for the City of Upland within 15 minutes of the complaint being served and gently explained that this is  a case of mistaken identity, and ABC, Inc. has nothing whatsoever to do with the matter—except that ABC, Inc. also had a cause of action against ABC Partners/ABC Brokerage. When the City Attorney became obstinate and insisted on keeping ABC, Inc. in the litigation, forcing them to prove a negative, Ms. Young declared her intention to file a motion under California Code of Civil Procedure Section 128.7, which would have told the Judge that ABC, Inc. felt the litigation was frivolous. It also would have forced the City plaintiff to come forward with affirmative evidence showing why it thought that ABC, Inc. was a proper defendant even after being faced with the information that ABC, Inc. was a competitor of ABC Partners/Brokerage. No such information existed. The City had simply been lazy about the investigation and cast too wide a net.

Ms. Young also reached out to the other defendants named in the matter, including ABC Partners/Brokerage, and politely asked them to call the City’s attorney to explain that ABC, Inc. was not involved, else ABC Partners/Brokerage would face a cross-complaint for trademark infringement and equitable indemnity. Recognizing the danger of fighting a two-front war, ABC Partners/Brokerage’s attorney contacted the City Attorney and averred that ABC, Inc. is not affiliated with ABC Partners/Brokerage in any way. Within 10 days from service, the City’s attorney dismissed the complaint against ABC, Inc., thereby saving Ad Astra’s client countless thousands of dollars in litigation expenses. The tactic here was Teddy Roosevelt style foreign policy: speak softly but carry a big stick.

 

Update on 2017 Transgender Protection Regulations

Author: Trina Clayton

With the recent media frenzy surrounding President Trump’s attempt to ban transgender individuals from serving in the military, and Attorney General Jeff Sessions’ formal determination that federal civil rights law does not protect transgender workers from employment discrimination, we thought it a particularly fitting time to highlight some of the new 2017 rights and protections afforded to transgender individuals, here in California.

In May 2017, the California Department of Fair Employment and Housing (DFEH) approved new regulations regarding transgender identity and expression in the workplace.  A new definition for “transitioning” was added and the regulations now prohibit discrimination against an individual who is transitioning, has transitioned, or is perceived to be gender transitioning. The regulations became effective July 1, 2017.

Restroom Facilities

Under the new regulations, employers must provide equal access to comparable, safe and adequate facilities without regard to the sex of the employee.

All employees have the right to use a facility that corresponds to the employee’s gender identity or gender expression, regardless of the employee’s assigned sex at birth.  An employer may not REQUIRE an employee to use particular facility and they are not allowed to ask for “proof” from an employee to allow them to use a particular facility.

This regulation applies to more than just bathrooms.  It also applies to other facilities including locker rooms and showering areas.   In order to protect the rights of ALL employees, employers shall provide feasible options to maintain privacy – such options might include locking toilet stalls, staggered shower schedules, and shower curtains.

Dress Standard

The 2017 regulations make it unlawful to impose upon an applicant or employee any physical appearance, grooming or dress standard which is inconsistent with an individual’s gender identity or gender expression – unless the employer can establish a business necessity.  Please note, “business necessity” is a difficult hurdle to overcome and “customer preference” is not considered as such.  If an employer does have a dress standard, it must be enforced in a non-discriminatory manner.

Preferred Name and Identity

The new regulations require employers to honor an employee’s request to be identified by a preferred 1) gender and 2) name or pronoun – including gender-neutral pronouns.  An employer can be held liable for a FEHA violation if the employer fails to abide by an employee’s stated preference. Employers can only insist on using an employee’s legal name or gender if it is otherwise required to meet a legally-mandated obligation.

Documentation

An employer cannot inquire or require documentation on sex, gender, gender identity, or gender expression as a condition of employment.

Employers should ensure their policies comply with these new regulations regarding transgender identity and expression.  Employers should also review their employee handbooks to make sure any policies contained therein comply with the new regulations.  For specific legal advice regarding transgender regulations or any other employment issue, please contact Ad Astra for guidance.

 

Forum Shopping? Even a Monkey Can Do It!

Author: Michael S. Dorsi

Attorneys often must choose where to file a lawsuit. They must estimate where the judge will be more favorable on procedure and substance, which court has more favorable procedures, and where the jury pool may be more sympathetic to the client. And readers should not be shocked  to learn that attorneys often consider the political leanings of judges.

However, forum shopping to the Ninth Circuit Court of Appeals can have unintended consequences. While the Ninth Circuit has a liberal reputation and has historically ruled in ways that pleased Democrats and against President Trump, it is also a large court. Six of the twenty-two active judges were appointed by George W. Bush, and another eight judges on senior status were appointed by Republican presidents. Every sitting, numerous litigants draw a panel with two or three Republican-appointed judges. Many of these Republican appointees are well-regarded by lawyers and litigants of all political stripes, but if a plaintiff’s goal is to file in the Ninth Circuit and draw a politically friendly panel, that is just bad math.Read More >

Company Seeks To Regain Stolen Domain Names Using CFAA

Written by Keenan W. Ng

An interesting Computer Fraud and Abuse Act case was recently filed in Virginia. In AcmeBilling Company v. John Doe, Plaintiff, Acme, who maintains numerous websites hosted by GoDaddy, alleges cyber criminals in China stole its domain names. These cyber criminals stole the domain names by gaining unauthorized access to Acme’s domain management account and altering the domain registration records for accounts owned and used by Acme. While Acme was able to recover some of its domain names by working with GoDaddy, GoDaddy unfortunately informed Acme the Chinese domain name registrar who had 14 of their domain names refused to return the websites.

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The CFAA’s Double Life: Criminal Application of a Dual Use Statute When the Stakes Are High-Profile

Author: Katy M. Young

Unauthorized access of a computer system can be civilly or criminally actionable under the Computer Fraud and Abuse Act (“CFAA”). One of the most-cited CFAA cases is U.S. v. Nosal, a criminal case brought by the U.S. Attorneys’ Office against David Nosal, formerly a high-level recruiter with Korn-Ferry. The company that Mr. Nosal worked for was high-profile enough to catch the U.S. Attorney’s attention when Korn-Ferry alleged that after leaving his employment with the firm, Nosal accessed the firm’s computer data without authorization. The U.S. Attorney’s office thus brought suit against Mr. Nosal using the criminal application of the CFAA.

The most recent high-profile CFAA case that caught the U.S. Attorney’s attention and resulted in criminal charges was the St. Louis Cardinals/Houston Astros hacking scandal. The Scouting Director for the Cardinals, Chris Correa, plead guilty to five counts of criminal violations of the CFAA for illegally accessing the Ground Control database maintained by former Cardinals executive Jeff Luhnow in his capacity as an executive for the Houston Astros. You can read all about the guilty plea here: http://www.cbssports.com/mlb/eye-on-baseball/25442384/report-former-cardinals-exec-to-plead-guilty-in-astros-hacking

Obviously, America’s pastime is high-profile enough to warrant the government spending resources to prosecute what is essentially private business espionage. But aside from baseball, what is it that catches the government’s attention in these kinds of cases? Ad Astra represents a law firm that has accused another law firm of hacking their third party cloud storage database of client files. The case is filed in State Court in Southern California but has not yet drawn the U.S. Attorney’s attention, although it has been covered by The Daily Journal and Law 360, both legal news outlets. Although not as high-profile as major league baseball, a hacking claim between opposing lawyers should draw the ire of government lawyers in the U.S. Attorney’s office who share Ad Astra’s concern for our esteemed profession. For the time being, Ad Astra will move forward with the civil claims under the CFAA and wait to see if the statute will be applied against the defendants in a criminal law context.

Harassment Prevention Training Expansion – Transgender Rights – SB 396

Author: Trina Clayton

With the federal government’s seemingly monthly attempts to chip away at the rights of transgender individuals – we wanted to start off 2018 with some positive news for the transgender community in California.  State law will soon expand mandatory harassment training to include training on transgender rights.

Current law requires California employers with 50 or more employees to provide supervisors with two hour of sexual harassment prevention training within six months of their assumption of a supervisory position, and every two years, as specified.  With the passage of Senate Bill 396, this training will now be required to include training on harassment based on gender identity, gender expression and sexual orientation.  SB 396 also requires employers to display a poster regarding transgender rights in a prominent and accessible location in the workplace – the Department of Fair Employment and Housing will develop this poster.

Other 2018 law relating to transgender rights will be discussed in greater detail in a subsequent blog.  Analysis of 2017 laws expanding the rights for transgender individuals can be found here. For specific legal advice regarding transgender regulations or any other employment issue, please contact Ad Astra for guidance.

Independent Contractor or Employee?  Better Take a Second Look

Author: Trina Clayton

On April 30, 2018, the California Supreme Court issued an opinion in Dynamex Operations West, Inc. v. Superior Court, which could change the workplace status of people across the state.  With this new ruling, the Supreme Court has clarified the standard for determining whether workers in California should be classified as employees or as independent contractors for purposes of the wage orders adopted by California’s Industrial Welfare Commission (“IWC”).  Most notably, IWC orders apply to issues such as overtime pay and meal and rest break requirements.

The Court’s unanimous decision in Dynamex has particular implications for members of the gig economy, such as Uber, Lyft, and Amazon, as well as members of other industries, including cannabis.

With this recent ruling, the Supreme Court essentially abandoned a standard that California courts had used for 30 years to determine employment status, based largely on how much control a business exercised over wages, hours and working conditions.  Instead, the Court in Dynamex applied the “ABC” standard (used in several other states) which sets out that a California worker is presumed to be an employee, not an independent contractor.  Workers are permitted to be classified as independent contractors only if the hiring business demonstrates that the worker in question satisfies each of three conditions:Read More >

Welcome to the Ad Astra Law Group, LLP Blog!

Welcome to Scripta Ad Astra, the blog of the Ad Astra LawGroup, LLP.  Our firm specializes in business, employment, and real estate litigation.  This blog will provide insight and updates on these practice areas, updates on the firm, and general musings from the firm’s attorneys.   We hope you come back to visit us.  Also, please feel free to reach out to us by email!  Per aspera, ad astra!

Litigation Tip: Settlement vs. Trial

Author: David Nied

It has been almost eight years since the Journal of Empirical Legal Studies published “Let’s Not Make A Deal: An Empirical Study of Decision Making in Unsuccessful Settlement Negotiations.” The study compared verdict outcomes with pre-trial settlement negotiations in over 2,000 cases between 2002 and 2005. The results of the study support the conclusion that it usually is better to settle a case than to go to trial. In support of this conclusion, consider the following:

  • Plaintiffs recovered less at trial than they would have recovered by settling in 61% of the cases;
  • Defendants did worse by going to trial rather than settling in 24% of cases;
  • Both sides made the right decision to go to trial in only 15% of the cases (i.e., the verdict was between plaintiff’s last settlement demand and defendant’s last offer);
  • On average, plaintiffs who made the wrong decision to go to trial recovered $43,000 less than the defendant’s last offer;
  • On average, defendants who made the wrong decision to go to trial ended up liable for $1.1 million more than they had offered;
  • Plaintiffs were more likely to make “poor” decisions to go to trial in contingency fee cases; and
  • Defendants were more likely to make “poor” decisions to go to trial where insurance coverage was generally unavailable.

So, although defendants make fewer bad decisions to go to trial, a bad decision is much more expensive on average. Interestingly, the study also found that making the wrong decision to go trial has actually increased over time based on a study of trial outcomes over 40 years through 2004. (You can read more about the study in a New York Times article. You also can purchase a copy of the article at Wiley.)

We do our best to help our clients understand the risks of proceeding to trial. That includes explaining that no two juries are the same and that not all jurors will see a case the same way a client might see it. And, especially for plaintiffs, it includes the likelihood of making the wrong decision. In most cases, it is better to make a deal.