The Chilling Effect of Threats to Sue for Defamation

by Paul Alan Levy

Ted Frank’s comment on my post yesterday about the y-y-yuge sanction imposed on Donald Trump for bringing a frivolous defamation claim hit the nail on the head – this was an April Fools Day prank.

But as Eric Turkewitz, who created the concept and posted the first blog on the subject, explains today, it was a prank with a serious substantive point — blustering threats to bring libel suits that cannot possibly succeed can have a chilling effect, just as the actual bringing of suits demanding millions of dollars in damages can have. It is one reason why we need anti-SLAPP statutes.

And the chilling effect is shown, in part, by the fact that a number of free speech litigators / bloggers who would have come in on the joke in the past sat out this time.  Maybe that’s because they just didn’t think it was funny, but I know for a fact that some of them (no names mentioned — they know who they are!) were spinning fantasies about how Trump might fashion a non-frivolous defamation claim and then throw his millions of dollars at litigating the cases to the bitter end.  And New York, where Trump lives and hence would likely sue on the assumption that Calder v. Jones allows him to do so, has a weak anti-SLAPP statute that would have provided no protection – that’s why Dan Snyder originally sued the Washington City Paper there. 

These threats do have an impact.  We need a statute.

A living wage calculator

Think California's proposed minimum wage is too high? Other states too low?

Consider this calculator for what constitutes a living wage, by state, created by an MIT professor.

Education Dep't rehires debt collectors fired for misleading consumers

As UPI reports:

Coast Professional and National Recoveries were among the five private collection agencies terminated in February 2015 after they made "materially inaccurate representations" to borrowers in default, the Education Department said. But in the final few months of 2015, Coast Professional was given an additional $863.5 million worth of student loans, and National Recoveries added $679.8 million for collections.

Here's the story.

Has This Judge Trumped the Donald?

by Paul Alan Levy

Could a $500,000,000 sanction for frivolous litigation be large enough that even Donald Trump would start taking the First Amendment seriously, and stop trying to use the courts to suppress lawful speech that he doesn’t like?

In the final analysis, that is the issue raised by Erik Turkewitz’ blog post today.  And considering how anxious Donald Trump has appeared to secure changes in the New York Times actual malice standard, and his proclaimed willingness to file a suit against a critic, knowing that the suit is unwinnable, just for the pleasure of “mak[ing] his life miserable, which I’m happy about”, it is good to see from Eric Turkewitz’s blog that a New York judge has finally had the guts to stand up against him. 

The case involved Trump’s lawsuit against Univision — a Mexican-owned Spanish-language media giant — for backing out of its connection with Trump’s beauty contest after he made hateful remarks about Mexicans.  Among the claims in the litigation was one for defamation, based on an Instagram message that placed a photograph of the Charleston church mass-shooter Dylann Roof next to a photo of Trump, with the implication that their racism was comparable.  Certainly the suggestion that committing mass murder with racist motives is comparable to appealing to racism to promote a candidacy for high office reflects an opinion that is open to debate, but it is plainly an opinion and in our system of free expression, “there is no such thing as a false idea.”   So the defamation claim, unlike the contract claim, was plainly frivolous.  (We have helped defendants with rather less resources that Univision stand up against Trump’s legal blustering.) 

The suit was removed from state to federal court and ultimately dismissed there.  New York’s anti-SLAPP law is both narrow and weak,  but in the opinion linked from Turkewitz’ blog post, a state court judge with the rather striking name of Lester Bruce Sullivan decided to impose sanctions for frivolous litigation.  And to make sure that the sanction would be felt, and thus have deterrent impact on Trump, the judge considered Trump’s reported declaration of net worth to the FEC, said to have placed it in “excess of $10 billion,” and imposed a sanction of $500,000,000.

Although Trump’s claim to be worth even $9,000,000,000 had been widely questioned, it seems to me that he will have trouble claiming that the judge overstated that number in calculating the appropriate sanction.  It remains to be seen whether he has success on appeal, whether in the Appellate Division or in the court of public opinion.

Study Finds Reading Consumer Contract Terms Lowers IQ, Causes Irritability

Here. Bad news for lawyers.

LA Times' David Lazarus Column on Native Advertising

Here.  Excerpt:

The problem is one of disclosure. Do news organizations do a sufficient job of helping people understand that one story or link is real news while another was provided by an advertiser?

* * *

Consumers might say: "If it's interesting content, what's the difference?"

The difference is that the goal of journalism is to inform and enlighten. The goal of advertising is to influence your thinking and behavior, typically to get you to buy something.

I wonder if we will see more FTC cases against native advertising.

A Sneaky Way of Falsely Enhancing Reputation Through the Suppression of Negative Reviews

by Paul Alan Levy

Techdirt carries word of an ingenious scheme that two California lawyers have been running to get unflattering reviews removed from Google’s search results without ever proving defamation in an adversary proceeding and, indeed, without risk of an adversary proceeding.

Opinion Corp., which hosts the consumer review site PissedConsumer.com, noticed a suspicious pattern of such link removals accomplished by companies that have been criticized on its site.  A company’s lawyers would file John Doe actions, but they never get around to issuing subpoenas to identify the posters (for which, in many jurisdictions,  they would have to make a Dendrite showing).  Instead, they claim to have identified the users by other investigative means; then they obtain confessions of error and fault from the formerly anonymous defendants; and finally they provide the ensuing court order to Google (another search engines) to get the matter removed from search results.  

The search engines are not bound by such orders, just as the hosting sites are not bound, but search engines have typically exercised discretion to remove enjoined content as a matter of judgment and good citizenship, even if the hosting site stands on its section 230 immunity.  Techdirt reports that the removal can extend beyond the specific comment that was found defamatory to the entire set of criticisms of the plaintiff company. And the agreed order that the Court is asked to sign need not even be in favor of the company that brought the lawsuit:  according to Techdirt's analysis, the plaintiff company could be a shell while the order grants relief for a second, real company.  And apparently there are some judges who don't look at the orders carefully enough to catch the bait and switch.

Momentum in both directions on the minimum wage

Back by Gov. Jerry Brown, California's proposal to raise the minimum wage holds out the possibility of a huge gain for workers. California's proposed $15 minimum would make it not just a leader in this country but also the world, catching up to global leaders France and Australia.

But the opposing side is also on the move, seeking state prohibitions on local minimum wage laws that require more than the state-wide law. Idaho recently became the 19th state to adopt such a measure.

Here's the Washington Post on developments in California, and here's BuzzFeed News on the expansion of state preemption of local laws.

Labor Dep't concerned about workers' comp opt-out program

NPR reports that the U.S. Department of Labor is looking critically at

a practice by thousands of employers in Texas and Oklahoma to opt out of conventional state workers' compensation in favor of benefits plans that provide lower and fewer payments, make it more difficult to qualify for benefits, control access to doctors and limit independent appeals of benefits decisions.

"What opt-out programs really are all about is enabling employers to reduce benefits," [Labor Secretary Tom] Perez says. Opt-out programs "create really a pathway to poverty for people who get injured on the job."

Read more here.

Even FTC Commissioners Fall for Phishing Scams

The Washington Post has the story here.