Another Important Win for Online Free Speech: Even Good Groups Bring Oppressive Trademark Lawsuits

The Court of Appeals for the Fourth Circuit has issued an important decision at the intersection of First Amendment and trademark law, marking the second time in two days that free speech has triumphed over expansive intellectual property claims.  On Monday it was the Ninth Circuit’s en banc decision in Garcia v. Google, rejecting an effort to use adventurous copyright theories to vindicate the plaintiff’s interest in protecting her reputation; the next day came the Fourth Circuit decision in Radiance Foundation v. NAACP, a ruling that bristles with excellent discussions of the boundaries between trademark law and the freedom of expression protected by the First Amendment.  

Both cases arose from lawsuits over the expression of extremists: in the first case, film-makers who seemed to delight in creating a provocation against adherents of Islam; in the second, a group of wingnuts who attack the NAACP for its supposed support for abortion by merely associating itself in some respect with Planned Parenthood.

Today’s blog post is about the second case, in which the Fourth Circuit comes close to holding, as several other circuits have done, that the use of a trademark for the purpose of non-commercial discussion of public issues is beyond the reach of the trademark laws.   The court’s discussion of this issue, as well of the danger to First Amendment rights of expanding the trademark laws into non-commercial terrain, will be cited for years to come.  Similarly, the court recognizes the need to construe the “likelihood of confusion” requirement narrowly when critical expression is at issue, and equally important for purposes of trademark doctrine, the court ultimately finds no likelihood of confusion without any slavish analysis of the “likelihood of confusion” factors.  The only disappointing part of the opinion is its treatment of the NAACP’s dilution claim, although, in the end, the panel roundly dismissed that claim based on a solid analysis of the fair use and non-commercial use defenses.  (Other blog posts about the case by EFF, Volokh Conspiracy, and Techdirt.)

FTC halts debt collection operations for threatening and deceiving consumers via texts

According to the Federal Trade Commission, federal courts in New York and Georgia, acting on an FTC motion, have temporarily halted three debt collection operations that the FTC alleges have violated federal law by threatening and deceiving consumers via text messages, emails, and phone calls. The FTC's press release explains:

[T]he defendants used text messages, emails, and phone calls to falsely threaten to arrest or sue consumers. They also unlawfully contacted friends, family members, and employers, withheld information consumers needed to confirm or dispute debts, and did not identify themselves as debt collectors, as required by law.

The defendants in the law enforcement sweep called “Messaging for Money” are known as Unified Global Group, Premier Debt Acquisitions, and The Primary Group.

The FTC's full press release is here.

$82 million verdict against debt collection firm

Last week, a Missouri jury awarded about a quarter-million dollars in compensatory and $82 million in punitive damages to a woman who was hounded for over a year by debt collector Portfolio Recovery Associates for a $1100 debt that wasn’t hers. The problem, according to the plaintiff’s lawyer, is the debt collector tries to collect without supporting documentation; the lawyer noted that the state attorney general has received numerous complaints of P.R.A. going after the wrong person.

The Kansas City Star has the story.

Federal judge: banks deceived Fannie and Freddie on mortgage-backed securities

"The magnitude of falsity, conservatively measured, is enormous," wrote U.S. District Judge Denise Cote of the Southern District of New York near the start of her a 361-page ruling in Federal Housing Finance Agency v. Nomura Holding America, decided last week after a four-week trial. The core question at issue in the case, in which a federal agency sued various financial agencies, was whether banks deceived the government-sponsored entities Fannie Mae and Freddie Mac about the nature of the mortgages contained in mortgage-backed securities the banks sold Fannie and Freddie. The court answered with a resounding yes. 

The New York Times explains the ruling and puts it in context:

Many on Wall Street have long argued that the banks did not generally break the law when they packaged shoddy mortgages and sold them to investors in the lead-up to the financial crisis of 2008.

But on Monday, in the starkest of terms, a federal judge dealt a strong blow to that version of history. She ruled that two banks misled Fannie Mae and Freddie Mac in selling them mortgage bonds that contained numerous errors and misrepresentations. . . .

Some financiers and housing industry analysts have since asserted that, while Wall Street was acting out of greed and with a cavalier disregard for risk, it did not act deceptively. But Judge Cote, in her order, took a dim view of the banks’ conduct. She said that loan guidelines were “systematically disregarded” and found “disturbing examples” showing that Nomura was willing to package and sell defective loans.

Read the full story, including a more detailed summary of the opinion's key findings, here. The decision itself is here.

Credit reporting agencies change policies to resolve States' investigations

Credit reporting agencies Experian, Equifax and TransUnion have agreed to pay $6 million to resolve an investigation by the attorney generals of 31 states into customer disputes over errors in their credit reports, fraud and identity theft. The three companies agreed to limit their marketing, wait longer before adding medical debt to a credit record, and impose higher standards on the creditors who supply them with data, among other changes.

The Boston Globe has the story.

Senators ask Attorney General to act against companies selling drugs as "dietary supplements"

The Hill reports that two senators are calling on Attorney General Loretta Lynch to take action against companies selling illegal drugs masquerading as dietary supplements.

In a joint letter to Lynch on Tuesday, Sens. Orrin Hatch (R-Utah) and Martin Heinrich (D-N.M.) asked the Department of Justice to enforce the dietary supplements rules and take punitive action against companies falsely labeling products that contain anabolic steroids, active pharmaceutical ingredients (APIs), or analogues of APIs as dietary supplements.

The Hill article is here.

"My Time as a Professional Debt Collector..."

Read this fascinating first-hand account of ten months in the life of a debt collector. The author's conclusion: "My agonizing time as a debt collector did have one bright spot ... . After spending ten months wallowing in the misery of others, I'd found it hard to be depressed myself."

(Warning for sensitive readers: the piece contains some words you can't say on TV.)

(For less sensitive readers: if you'd like a refresher on what those are, go here for the classic George Carlin commentary.)

(BREAKING) $5 billion penalty for five big banks in currency manipulation scheme

The NYT reports today:

Adding another entry to Wall Street’s growing rap sheet, five big banks have agreed to pay more than $5 billion and plead guilty to multiple crimes related to manipulating foreign currencies and interest rates, federal and state authorities announced on Wednesday.

The Justice Department forced four of the banks — Citigroup, JPMorgan Chase, Barclays and the Royal Bank of Scotland — to plead guilty to antitrust violations in the foreign exchange market as part of a scheme that padded the banks’ profits and enriched the traders who carried out the plot.

Read more here.

In a statement, Public Citizen President Rob Weissman criticized the settlement as insufficient and urged more aggressive regulatory action: "[N]otwithstanding today’s announcement and others like it, these banks are not deterred from violating the law – indeed, they are literally not subject to the same standards as other banks and other companies. A democratic society cannot tolerate having banks above the law. There’s a solution to this problem: break them up." Read the whole statement here.

FTC complaint against YouTube Kids charges deceptive "family friendly" branding

Updating an earlier complaint to the FTC, Campaign for a Commercial-Free Childhood and Center for Digital Democracy charge that Google engages in false and deceptive advertising by marketing its YouTube Kids as appropriate for children under five despite containing material about child suicide, unsafe behaviors such as playing with matches and tasting battery acid, and ads for alcohol.

According to CDD, "Google claims that YouTube Kids was 'built from the ground up with little ones in mind' and is 'packed full of age-appropriate videos.' . . . Google also assures parents that they 'can rest a little easier knowing that videos in the YouTube Kids app are narrowed down to content appropriate for kids.'"

You can read more here.

(A somewhat misleading L.A. Times story characterizes the charge as simply that the content is inappropriate for kids. That's not the whole story: CCFC and CDD are attacking misleading advertising about the content, not attacking the content per se. Google can disseminate whatever content it wants, of course; the trouble arises when it markets that content in a deceptive manner.)

A hard-fought auto safety recall

The Japanese airbag-manufacturer Takata announced this week it would expand its recall of defective airbags to up to 34 million vehicles. The New York Times reports that six deaths and over a hundred injuries have resulted from the flaw, which can cause the airbags to explode violently on deployment, spraying metal at passengers.

As we’ve discussed previously, the fight between federal regulators and Takata over the scope of the recall has been going on since last fall.

The Times notes that the National Highway Traffic Safety Administration has been receiving complaints about this issue for almost fifteen years.

Read the story here.