Charles Carreon’s Trademark Claims End, Not With a Bang, but a Whimper

by Paul Alan Levy

Last summer, I blogged about trademark claims threatened by Charles Carreon, a California lawyer with a notorious past who maintains a private practice out of his home in Arizona.  He had threatened suit against an anonymous blogger for making fun of Carreon at a web site using the domain name charles-carreon.com, leading us to sue for a declaratory judgment of non-infringement.  His threats against the company that had sold the blogger a private registration induced that company to temporarily out the blogger, although it restored the private registration after Public Citizen interceded.

There have been several developments since I posted that story, but the bottom line is that, after doing his best to avoid being served and hence forced to defend the case, Carreon surrendered completely, serving a Rule 68 judgment that gave the blogger everything he had sued, and exposing Carreon to claims for a substantial award of attorney fees.   Bloggers at Popehat and Techdirt have followed the story in some detail, as has a recent law school graduate. Some members of the public have been deliberately visiting PACER on a regular basis, using their RECAP software to ensure that any member of the public can get free access to the entire court file.  Suffice it to say that, after ducking service for several months, Carreon was served outside a courtroom in the vary federal court in which the declaratory judgment action was filed.   Then, after demanding that the blogger accept restrictive terms on his use of the domain name, threatening to sue Public Citizen for damages if its client would not agree, Carreon simply folded his hand and submitted an offer of judgment under Rule 68, which the blogger accepted because it gave him complete relief on the merits.

Virginia Supreme Court Reverses Preliminary Injunction Against Yelp Review

by Paul Alan Levy

The Virginia Supreme Court has summarily reversed a preliminary injunction requiring the author of a consumer review criticizing a Washington DC contractor to revise her statements about the contractor.   We filed a petition for review arguing that the injunction was an impermissible prior restraint, in addition to violating the common law rule that "equity will not enjoin a libel."  Without even waiting for a response from the plaintiff, the Supreme Court invalidated the injunction first on the highly technical ground that it did not specify the time during which the injunction would be effective, but also because "the preliminay injunction was not justified and . . . the respondents have an adequate remedy at law." 

As a result of the ruling, the contractor, Christopher Dietz, will be able to pursue his claims for damages, but in the meantime, members of the public will be able to review Jane Perez's criticism and Dietz's responses, and make up their own minds.

The preliminary injunction hearing transcript (with testimony from both Dietz and Perez), the exhibits from both sides, and our petition for review to the Virginia Supreme Court as well as that court's ruling are linked from this page.

Rochelle Broboff on the Supreme Court's Nitro-Lift Decision and the Concern Over Supreme Court Unanimity in FAA Decisions

We posted in late November about the Supreme Court's unanimous per curiam Federal Arbitration Act (FAA) decision in Nitro-Lift Technologies v. Howard. There, the Justices held that, in light of an arbitration clause, only an arbitrator and not the Oklahoma courts could, in the first instance, hold contract provisions unenforceable.

Now, in this article, Rochelle Broboff of the Constitutional Accountability Center explains why the Supreme Court's decision in Nitro-Lift and, in particular, its unanimity concerns her. She doesn't argue that Nitro-Lift is at odds with any of the Court's precedents. Rather, her concern is that the current members of the Court may have accepted its recent FAA rulings, including those that, Broboff says, are at odds with the text and purpose of the 1925 act. She says that a willingness to buck the recent trend may be needed when the Court hears two more cases later this Term concerning the interaction between class actions and the FAA:

The conservative majority's forced arbitration jurisprudence — once called "an edifice of the Court's own creation" by former Justice Sandra Day O'Connor — is encountering persistent resistance from state courts and from lower federal courts. However, that fight should be far from over, even if there are presently not five votes to reverse course. In the past few weeks, the Supreme Court has granted certiorari in two FAA cases involving the availability of class-wide relief in arbitration: American Express Co. v. Italian Colors Restaurant and Oxford Health Plans LLC v. Sutter. In American Express, the plaintiffs need an expert report the cost of which dwarfs the financial interest of any individual plaintiff. If the class action remedy is not available in the mandatory arbitration proceeding, then there will be no means for injured parties to band together to pay for the expenses of the expert. The arbitration remedy will, in fact, provide no remedy at all. In Oxford, after the district court held that a mandatory arbitration clause precluded a class action claim in court, the arbitrator concluded that the class claim could proceed in arbitration, based on the term "civil action" in the arbitration agreement. The company challenges the arbitrator's interpretation of the contract, arguing that the mandatory arbitration provision completely eliminates any access to class-wide relief.

 

The Value of Cell Phones: Crime Reduction?

I often hear people complain about their cell phones and their cell-phone service providers. But even if your cell phone doesn't work too well and your cell-phone company hides fees and taxes in fine print, having a cell phone is worth it, perhaps for a reason you never contemplated. According to this article by law professor Jonathan Klick and two co-authors, there is a strong correlation (though no proof of causality) between cell-phone use and crime deterrence. Read this press release for a overview of Klick's findings. (Yes, I realize that there's no excuse for deceptive marketing by cell-phone service providers!)

Harvard offering free online courses.

If you didn't get to take all the courses you wanted while in law school, Harvard has a deal for you. Harvard Law School is now accepting applications for its first online course via edX—a new online education venture between six leading universities. The 12-week copyright course begins on January 28 and will be open to 500 students. Applications for a spot in the free class, taught by William Fisher III, director of Harvard University's Berkman Center for Internet & Society, must be received by January 3.

You won't receive any law school credit for the course, but you do receive a certificate of completion. I don't know if they have any plans for a consumer law course.

Key Details of Tax Cut Bill Passed by Senate

Here.

The Freedom of Information Act in President Obama's First Term

by Brian Wolfman

On his first full day in office, President Obama issued a memorandum on the Freedom of Information Act (FOIA). He quoted Louis Brandeis's famous line that "sunlight is said to be the best of disinfectants" and directed federal agencies to "adopt a presumption in favor of disclosure." Less than two months later, Attorney General Holder followed suit and "strongly encourage[d] agencies to make discretionary disclosures of information." "An agency," he said, "should not withhold records merely because it can demonstrate, as a technical matter, that the records fall within the scope of a FOIA exemption."

So, has the Obama Administration kept its promise of more openness? We posted in March 2010 that, according to a review conducted by the Associated Press, annual FOIA reports "filed by 17 major agencies found that the use of nearly every one of the law's nine exemptions to withhold information from the public rose in fiscal year 2009." The results of the AP's review were consistent with another report from the National Security Archive showing that about a year into the new administration most federal agencies had not yet implemented the Obama and Holder memoranda.

Attorney General Holder's memorandum stated that the Department of Justice would “defend a denial of a FOIA request only if (1) the agency reasonably foresees that disclosure would harm an interest protected by one of the statutory exemptions, or (2) disclosure is prohibited by law.” The memorandum was taken by some openness advocates as evidence that the Department of Justice would defend FOIA litigation less aggressively than had the Bush Administration.

But a March 2012 report by the FOIA Project of the Transactional Records Access Clearinghouse (TRAC) at Syracuse University concluded that

Available evidence indicates that no affirmative steps needed to implement the new [Holder memorandum] defensive standards were ever taken [by the Department of Justice]. Further, there is little evidence that these new standards have made any impact on actual Department of Justice practices in defending federal agency withholding. In short, the new defensive standards seem to have become simply empty words on paper.

And, now, a new TRAC report issued on December 20 finds that there's been more FOIA litigation in the Obama Administration than in the prior administration. This may mean that executive agencies have been no more open (and perhaps less open) during the Obama Administration than they had been during the Bush Administration.

But more detail on the types of cases litigated over the relevant periods is needed before accurate conclusions can be drawn. One lawyer quoted in the TRAC report suggests that agency responses to FOIA requests have slowed during the Obama Administration because of funding cuts and, so, more lawsuits are being brought because “more people just got tired of waiting.” (FOIA generally requires that an agency respond to a request within 20 business days, but many agencies are seriously backlogged, and so some suits are filed even before the agency has responded to the request.)

 

Plaintiffs and Toyota Agree to Sudden-Acceleration Settlement

by Brian Wolfman

The Impact Litigation Journal reports that

The parties have announced a settlement in the Toyota sudden acceleration multi-district litigation pending in a Santa Ana federal court. Under the terms of the settlement, which must now receive judicial approval, Toyota will install a brake-override system in some 3.25 million vehicles in addition to paying cash compensation, which will be measured by the diminution in the value of the cars that were the subject of the lawsuit. As many as 16 million current and former Toyota owners are eligible to participate in the settlement.

If approved by the court, this settlement will be one of the largest automotive class-action settlements in history. To me, the interesting part of the settlement is the recall relief that requires Toyota to install brake-override systems in class members' cars.

Read the proposed settlement. Exhibit 1 to the agreement describes the notice program aimed at alerting covered Toyota owners to the deal. Exhibit 10 explains which Toyota models are covered by the deal. Exhibit 16 explains that the amounts of money available for distribution to some individual class members will differ, among other reasons, based on the class member's state of residence (because, the settling parties say, the relevant law differs among the states).

As described in Exhibit 15, the settlement also requires that Toyota

fund scientific research by leading U.S. universities into the development of new active safety technologies and/or standards, as well as testing guidelines for emerging technologies ... . In addition, Toyota has agreed to fund a national multi-media and community-based public-education campaign, supported by scientific research, that works to inform, enhance and promote safer driving among consumers. The parties agree that these safety research and education programs are tethered to the nature of, and certain issues in, the Actions and further the interests of Class Members.

In this regard, note that the relevant federal regulator -- the National Highway Traffic Safety Administration (NHSTA) -- has said the underlying safety problem wasn't that Toyota cars accelerated out of the blue, but that drivers unintentionally accelerated when they meant to hit the brakes. We blogged earlier about lawsuits that claimed that cars should be equipped with brake-override technology that shuts down the accelerator when the brakes are applied. NHTSA is seeking a new federal regulation that would require all new cars and light trucks to include brake-override systems.

Gutierrez v. Wells Fargo Bank Reversed in Part

On Wednesday the Ninth Circuit gave Wells Fargo a belated Christmas present in Gutierrez v. Wells Fargo Bank, --- F.3d ----, 2012 WL 6684748 (9th Cir. 2012), vacating the injunctive and restitution relief ordered by the lower court. The district court decision had held Wells Fargo's procedures for ordering debit card withdrawals unfair and fraudulent under California law.  The procedures, which charged the highest amounts first regardless of whether they were incurred after charges for lower amounts, had the effect of maximizing the bank's fees.  Much of the Ninth Circuit's decision was based on preemption, though the panel did affirm the distict court's judgment that Wells Fargo violated California law by making statements that were likely to mislead depositors.  Bloomberg has more here and here is the Wall Street Journal's take.

Resolution of the Steubenville Defamation Case

by Paul Alan Levy

I am pleased to note that the parties to the defamation action in Steubenville, about which I blogged earlier this month, have resolved the matter in the very sensible manner to which my blog post pointed:  the young man whose nasty behavior spurred much of the commentary was allowed to apologize for his misconduct while proclaiming his innocence of the much more serious abuses of which some anonymous commenters had accused him, while the blogger acknowledged that there was no evidence of the protagonist's involvement in such abuses.

Sad to say, this is an instance in which not only the defense against subpoenas to identify anonymous posters, but the bringing of a defamation action itself, may have done some good.  A number of people involved in the situation have told me privately that it was not until they read my blog post and compared it to what they had read in the blog comments that they appreciated that some of the anonymous speakers may have gone just a bit too far.

ADDENDUM

This post was inadequate, as originally posted, for failure to acknowledge the key role played by Ken White over at Popehat -- he put out a call for lawyers to defend the speakers in this case, and sent several Does to Public Citizen.  And although I knew from counsel involved that they were in active discussions about ending the case, it was from his concluding post about the case that I learned that the settlement had been concluded. 

I can't say I agree with every one of Ken's conclusions about the case, but his role here was invaluable.