Dow Jones settles its hot news claims against Briefing.com -- and gets only words

by Paul Alan Levy

The blogosphere has been reverbrating today with news of the settlement of Dow Jones’ lawsuit against Briefing.com, which features an admission by the defendant  of liability for copyright infringement and DMCA violations, as well as “common law misappropriation of certain ‘hot news’ including the news headlines listed in Exhibit D of the Complaint.”   See paragraph 5 of the consent judgment.  Dow Jones has been trumpeting the last clause of paragraph 5, claiming that “the settlement vindicates the use of the hot news doctrine, [and] saying in a statement: ‘For those who question whether hot news misappropriation has a place in the modern era, this case demonstrates that it is a vital and effective tool for protecting time-sensitive content.’”

Actually, I read the settlement document in exactly the opposite way – it shows that the hot news doctrine has no content other than as a buzzwordy club with which to threaten lawsuits and run up the defendants' litigation costs.  Apart from the “admission,” the settlement consists of the payment of a lump sum in an undisclosed amount that covers both the infringement and the misappropriation, as well as a permanent injunction.  Nothing tells us how much the damages for misappropriation were.  But if hot news were a key part of the enforcement strategy, you would expect the injunction to cover future “hot news” misappropriation.  In fact, the only thing that has been enjoined (paragraph 6 of the consent judgment) is “further infringement of Dow Jones’ copyright in articles published by Dow Jones.” 

One of the most troubling aspects of the hot news doctrine is its vagueness, and the uncertainty about what it covers except as revealed, after the fact, by intensive and certainly very expensive litigation.  In this case as in the flyonthewall case, and indeed as in all the other hot news cases, copyright claims were brought along with hot news claims.  In the flyonthewall case, analysis of the papers filed in connection with the attorney fee application suggests that the two sides spent more than two million dollars on the hot news part of the litigation, and in the district court alone.

But what social value does the doctrine provide, apart from the prevention of the sort of copying that the copyright laws forbid? 

Gannett Shamed Into Changing Policy on Responding to Requests to Identify Blog Commenters

An interesting AP article has appeared about a controversy in Wisconsin -- after several nasty comments appeared on the website of a Wausau newspaper about a local public official, the official asked the paper who was writing the nasty comments, and lo and behold, the paper just turned over one critic's identity.   Not only without notice to the blog poster, apparently, but without even a subpoena or other court order.

There are, of course, ISP's who give up this information too easily, but you'd think that a newspaper, with its understanding of the importance of anonymous sources, would know better than that.

There is a silver lining -- the contretemps has embarrassed Gannett into announcing chain-wide guidelines under which identifying information will be released "only if ordered by a court or if a comment contains a threat of imminent harm."  It is unclear whether that means that the paper will just roll over for subpoenas, or will insist on giving notice so that the Doe has an opportunity to protect his or her anonymity through the familiar Dendrite process.  New Jersey Online (the web site for the Newark Star Ledger and other papers) had to go through a similar controversy -- it released the identity of an online critic in routine response to a subpoena without giving any notice, and after facing a suit for that release now follows grudging policy of giving a few days notice before complying with subpoenas.

UPDATE:

The original article to which I linked is no longer online; I have changed the link to a version that IS still online.  I discuss Gannett's aggressive defense of its users in this later post.

Responding to prosecutors seeking to identify anonymous bloggers — Google and other ISP’s could learn from the mainstream media

by Paul Alan Levy

There have been several stories recently covering the resolution of a lawsuit by Tom Rich, a formerly anonymous blogger, against the City of Jacksonville and a pair of prosecutors who went along with Robert Hinson, a rogue deputy sheriff, by using the criminal subpoena power to identify the blogger, who criticized a powerful local religious figure who ran Jacksonville’s First Baptist Church.  The deputy turned the blogger’s name over to the church,  which promptly expelled the blogger; meanwhile the deputy dropped his investigation.  Regrettably, no attention has been paid to the spineless behavior of the ISP’s who went along with the criminal subpoenas without asking any questions or giving the blogger a chance to defend his anonymity.

Dodd-Frank Conference Online

Last month the Center for Consumer Law at the University of Houston Law Center held a half-day conference on the Dodd-Frank Wall Street Reform and Consumer Protection Act. 

The conference provided an over-view of Dodd-Frank and explained how its provisions might affect lawyers and their practice. Topics included the new Consumer Financial Protection Bureau, Community Banks, Whistleblowers, Corporate Governance and the regulation of Consumer Credit. Speakers included:

Richard Alderman, Associate Dean and Director of the Center for Consumer Law, University of Houston Law Center
John R. Brantley, Partner, Bracewell & Giuliani LLP
Jim Hawkins, Assistant professor, University of Houston Law Center
Julie Hill, Assistant Professor, University of Houston Law Center 
Michael J. Lombardino, Associate, Bracewell & Giuliani LLP
Ed Mierzwinski, Consumer Program Director, U.S. Public Interest Research Group

Papers and video are now online.

Investing in Litigation

by Brian Wolfman

It's well known that class actions and other aggregated litigation require many lawyers, paralegals, and experts to make them go. And so, the well-heeled, repeat-player lawyers finance the litigation for everyone else. As a result, their paydays may be larger when the case settles or goes to a plaintiffs' judgment. But what may not be well known is that the banks and hedge funds are getting into the act as well, financing a range of litigation, including relatively small-stakes individual cases. As today's New York Times explains:

Large banks, hedge funds and private investors hungry for new and lucrative opportunities are bankrolling other people’s lawsuits, pumping hundreds of millions of dollars into medical malpractice claims, divorce battles and class actions against corporations — all in the hope of sharing in the potential winnings.

And, like the contingent-fee system, the involvement of big-time investors may provide injured people access to the courts and improve the quality of justice:

A review by The New York Times and the Center for Public Integrity shows that the inflow of money is giving more people a day in court and arming them with well-paid experts and elaborate evidence. It is helping to ensure that cases are decided by merit rather than resources, echoing and expanding a shift a century ago when lawyers started fronting money for clients’ lawsuits.

The Times article suggests some abuses as well. Read the whole article here.

Another Academic Attack On Disclosure

Omri Ben-Shahar of University of Chicago and Carl E. Schneider of Michigan have written The Failure of Mandated Disclosure.  Here's the abstract:

This article explores the spectacular prevalence, and failure, of the single most common technique for protecting personal autonomy in modern society: mandated disclosure. The article has four sections:

(1) A comprehensive summary of the recurring use of mandated disclosures, in many forms and circumstances, in the areas of consumer and borrower protection, patient informed consent, contract formation, and constitutional rights;

(2) A survey of the empirical literature documenting the failure of the mandated disclosure regime in informing people and in improving their decisions;

(3) An account of the multitude of reasons mandated disclosures fail, focusing on the political dynamics underlying the enactments of these mandates, the incentives of disclosers to carry them out, and, most importantly, on the ability of disclosees to use them;

(4) An argument that mandated disclosure not only fails to achieve its stated goal but also leads to unintended consequences that often harm the very people it intends to serve.

Fed Governor Gets It Right - Mortgage Servicing is Broken

by Alan White

The newest Federal Reserve Governor and former state banking regulator, Sarah Bloom Raskin, spoke at this week's National Consumer Law Center conference in Boston about systemic problems in mortgage servicing.  Unlike other bank regulators, she does not attempt to minimize the failures revealed by the robosigners scandal. 

Foreclosure affidavits attest, among other things, to the fact that a homeowner is in default.  Servicers are getting this wrong on a regular basis, as a result of misapplication of payments, forced-place insurance, and other errors.  Governor Raskin also points out that there are no major economies of scale in servicing defaulted mortgages, and no effective competition for the business.  The implication is that homeowners and investors are not well served by the extreme level of concentration in this slice of the banking industry (the big four banks service more than half of all mortgages.)

This sentence from the Governor's speech sums it up nicely:

"While there may be some specific practices--"robo-signing" among them--that are possible to isolate and eliminate, chronic, uncured problems continue to plague this industry."

The Politics (or Not) of the Bipartisan Deficit Reduction Commission

Former Senator Alan Simpson and Erskine Bowles, co-chairs of the National Commission on Fiscal Responsibility and Reform, last week made known their preliminary views on how to deal with the national deficit through budget cuts and tax changes. The whole commission will issue its formal report by December 1. Read the co-chairs' detailed proposal, and then read Michael Hiltzik's critical column in the LA Times.

Post-Argument Coverage of AT&T v. Concepcion

by Deepak Gupta

Because I don't have a crystal ball, I'll leave to others the task of making predictions based on yesterday's oral arguments before the U.S. Supreme Court in AT&T v. Concepcion.  (By the way, here's some of the latest scholarship on such prediction-making.)

If you want to play along at home, you can come up with your own prognostication based on the transcript, one of the excellent summaries by Professors Lawrence Cunningham or Jean Sternlight, or some of the press coverage:

• "Overall," according to SCOTUSblog, "post-argument predictions about the case’s outcome tilt toward a victory by respondents Vincent and Liza Concepcion, but not everyone was willing to make predictions based on the argument." 

• "Recent Supreme Court decisions have generally favored the enforcement of arbitration agreements and have been wary of aspects of class-action litigations. But it was hardly clear at Tuesday’s arguments that those two trends would continue in the latest case." Adam Liptak, Supreme Court Weighs Class-Action Suits, New York Times

• "A victory for consumers and class action litigators seemed possible on Tuesday as the Supreme Court heard arguments in a high-stakes dispute over clauses that block class actions as a way of resolving contract disputes." Tony Mauro, Class actions on the ropes? Not likely, National Law Journal

• "My sense tells me that the anti-consumer, anti-class action bias will win this one. Not so much on the merits, but because of the politics." Steve Berk, AT&T v. Concepcion: Almost live from the Supreme Court,The Corporate Observer

• "[I]t doesn't look as though there are too many votes at the high court to do away with the right of consumers to band together to sue the great American manufacturers of fine print." Dahlia Lithwick, Can You Hear Them Now? The Supreme Court reads the fine print on your cell phone contract, Slate

• "Based on what was said during the argument, I predict a 8-1 or 7-2 vote for the consumers and California, with Alito dissenting and Roberts a toss up. Thomas, who never speaks at oral argument, will vote for the consumers and state on federalism grounds, as he always does in FAA cases." Lawrence Cunningham, Argument in Class Waiver Case Favors Consumers, States, Concurring Opinions

• "The Supreme Court seemed disinclined to let companies use legal fine print to block class actions, with several justices suggesting they might defer to state courts that ruled in favor of consumers." Jess Bravin, Justices Question Contracts That Block Class Actions, Wall Street Journal

• "AT&T's odds are mixed: ... Justices Clarence Thomas and Antonin Scalia are sympathetic to these cases due to their states' rights ideology. But no one will be surprised if AT&T and its big business backers prevail." Stephanie Mencimer, Consumer Protection's Citizens United, Mother Jones

• "In sum, I think Respondents have to be pleased with how the argument went.  A significant number of Justices seemed to recognize that some arbitration provisions are unconscionable, and that second-guessing lower courts’ unconscionability rulings can raise some difficult federalism and administrative issues." Jean Sternlight, ADR Prof Blog

• "While Chief Justice John Roberts and Justice Samuel Alito appeared this morning to join Mr. Pincus in trying to come up with support for preemption in this case, it appears that they may come up a few votes short (with the usual caveat that it is always a risky business to predict how the Court will rule based on oral argument)." Elizabeth Wydra, ACSblog.

For you ultrawonks out there, here's even more coverage:

• David Savage, Supreme Court weighs whether consumers' small suits can be combined, Los Angeles Times
• Robert Barnes, Justices hear case on class-action arbitration, Washington Post
• Jeremy Hobson, Is banning class action lawsuits unconstitutional?, NPR Marketplace (interviewing David Lazarus of the L.A. TImes)
• Ashby Jones, Class-Action Lawyers Breathing Easier After High Court Argument, Wall Street Journal
• Bill Mears, High court to decide dispute over taxes on 'free cell phone,' CNN
• Mark Sherman, Court hears dispute over 'free' phone, Associated Press
• Joan Biskupic, Supreme Court hears sales tax case on 'free' phone, USA Today
• Jon Hood, The End of Class Actions?, Consumer Affairs
• Greg Stohr, Consumer Arbitration case divides U.S. Supreme Court, Businessweek
• Lawyers USA, Supreme Court hears AT&T class action waiver dispute, Daily Record
• Brendan Fischer, Supreme Court Considers Corporate Right to Mandatory Arbitration, Center for Media and Democracy
• David Heath, High Court Ponders If Companies Can Force Consumers to Sign Away Right to Class-Action Suits, Center for Public Integrity
• Erika Morphy, A lot hinges on SC's ruling in $30 cellphone sales case, E-Commerce Times
• Scott Lemieux, Consumer Protection at the Supreme Court, The American Prospect
• Nan Aron, Will the Supreme Court Grant Big Business a License to Steal
• Ian Milhiser, The Supreme Court's One Thousandth Cut Against Consumers, Center for American Progress

We posted some of the pre-argument coverage here -- most notably these columns by David Lazarus in the LA Times and Prof. Brian Fitzpatrick (Vanderbilt Law) in the SF Chronicle.  An archive, including all of the briefs, is available here.

Times Coverage of AT&T Mobility Oral Argument

Here.