Facebook agrees to Judgment in Putative Class Action

Eric Goldman and Venkat Balasubramani previously blogged about the filing of a class action suit against Facebook earlier this year in California. My thoughts after reading the complaint several times was that while I agree that Section 230 would likely immunize Facebook for the content of unwelcome text or SMS messages, the statute would not necessarily protect Facebook from potential liability for the mechanism itself and/or related policies. Well, don’t expect answers to these questions any time soon.

While it has apparently not yet been entered by the Court, yesterday Facebook filed a Stipulated Entry of Judgment of Dismissal with Prejudice and General Release. Per the stipulation, Facebook has agreed to implement a “notice system” whereby it will provide text message recipients with a way to stop receiving such messages from Facebook (although the stipulation contains some language suggesting that this notice will only be included in every 15th message transmitted by Facebook), identify Facebook as the sender of such messages, and press mobile carriers to utilize “deactivation logs” to reduce the frequency of undesired text messages transmitted by Facebook. Facebook has also committed to pay plaintiff and her attorneys in amounts to be determined by the Court.

No doubt Section 230 would have found its way into a Facebook motion and/or answer, given Facebook’s assertion in Paragraph 8 of the stipulation that it didn’t do anything wrong, and that “it is immune from any liability under the [CDA].” (emphasis added)

UPDATE:  On January 23, 2008, Judge Fogel entered a dismissal order terminating this case.

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Anthony v. Yahoo! – Summary and Update

In 2005 Florida resident Robert Anthony filed a class action lawsuit against Yahoo! in the Northern District of California. Anthony’s complaint, as amended, alleged that Yahoo! created and perpetuated false and/or non-existent profiles on its on-line dating services (Yahoo! Personals, which Yahoo! states has “millions of users”, and Yahoo! Premier), with the intention of fooling people into joining the services and renewing their memberships. Anthony’s causes of action included breach of contract, fraud, negligent misrepresentation and violations of Florida’s Deceptive and Unfair Trade Practices Act (“FDUTPA”).

In a March 2006 order Judge Ronald M. Whyte granted Yahoo!’s motion to dismiss the contract claim (“Anthony cannot identify any contractual term that requires Yahoo! not to create or forward false profiles.”), but denied the motion as to the fraud, negligent misrepresentation and FDUTPA claims. Yahoo! had argued that such claims were barred by Section 230, but the court noted that Anthony alleged that Yahoo! created the false profiles and sent them to users, rendering Section 230 inapplicable.

Interestingly, the court also withheld Section 230 immunity with respect to Yahoo!’s alleged transmittal of profiles of “actual, legitimate former subscribers whose subscriptions had expired and who were no longer members of the service.” The court reasoned that while such profiles were created by actual, former users of the service (and not Yahoo!), “Anthony posits that Yahoo!’s manner of presenting the profiles – not the underlying profiles themselves – constitute fraud.” (emphasis added). It would have been nice if the court would have elaborated further upon this point.

Anthony next filed a second amended class action complaint which seeks damages in excess of $5 million and replaces the breach of contract claim with a claim for “Breach of the Implied Covenant of Good Faith and Fair Dealing.” Anthony states in this most recent pleading that he “believes even stronger evidence of fraud can be obtained from an examination of Yahoo!’s computer systems.”

The parties have briefed, but the court has not ruled, on the plaintiff’s motion for class certification.

Presumably evolving from two mediation sessions presided over by a former federal magistrate, this past summer the parties entered into a settlement agreement, which provides for the certification of a nationwide settlement class consisting of “all paid subscribers in the United States to Yahoo! Personals (including Yahoo! Personals Premier) between October 1, 2004 and the date of preliminary approval of this Settlement by the Court.” The settlement would, among other things, require Yahoo!, for two years, to maintain a “Report a Complaint” link, render certain inactive profiles unsearchable, and give canceling members the opportunity to delete their profile. Yahoo! also must place $4 million in a common fund for legal fees and distribution to authorized claimants.

In August, Judge Whyte preliminarily approved the settlement and requisite notice to class members. A final approval hearing is scheduled for next Friday, November 30, 2007, and as of this afternoon only one objection appeared on the court’s online docket.

6/16/2010 UPDATE: Here’s a link to the settlement website. The site notes that “The Court held a hearing (the “Final Approval Hearing”) . . . on Friday, November 30, 2007 at 9:00 a.m. The settlement was approved as fair, adequate, and proper. However, appeals were filed. These appeals have now been resolved.”

CRS Report on Proposed Internet Gambling Regulations

The good folks at opencrs (“Congressional Research Reports for the People”) have posted a recent Congressional Research Service report describing the Unlawful Internet Gambling Enforcement Act passed last year, and implementation regulations issued last month by the Fed and the Treasury Department.

Here’s the Summary contained in the Report:

The Unlawful Internet Gambling Enforcement Act (UIGEA) seeks to cut off the flow of revenue to unlawful Internet gambling businesses. It outlaws receipt of checks, credit card charges, electronic funds transfers, and the like by such businesses. It also enlists the assistance of banks, credit card issuers and other payment system participants to help stem the flow. To that end, it authorizes the Treasury Department and the Federal Reserve System (the Agencies), in consultation with the Justice Department, to promulgate implementing regulations. Proposed regulations have been announced with a comment period that ends on December 12, 2007, 72 Fed. Reg. 56680 (October 4, 2007).

The proposal addresses the feasibility of identifying and interdicting the flow of illicit Internet gambling proceeds in five pay systems: cards systems, money transmission systems, wire transfer systems, check collection systems, and the Automated Clearing House (ACH) system. It suggests that, except for financial institutions that deal directly with illegal Internet gambling operators, tracking the flow of revenue within the wire transfer, check collection, and ACH systems is not feasible at this point. It proposes exempting them from the regulations’ requirements, but invites comments that offer alternative approaches. It charges those with whom illegal Internet gambling operators may deal directly within those three systems, and participants in the card and money transmission systems, to adopt policies and procedures to enable them to identify the nature of their customers’ business, to employ customer agreements barring tainted transactions, and to establish and maintain remedial steps to deal with tainted transactions when they are identified. Introductory remarks explain why the Agencies rejected a [“check list of unlawful Internet gambling operators”] approach. Several bills have been introduced to augment these efforts, including H.R. 2046 (Internet Gambling Regulation and Enforcement Act), H.R. 2607 (Internet Gambling Regulation and Tax Enforcement Act) and H.R. 2610 (Skill Game Protection Act).

The Report is a great read for folks with an interest in the regulation of online gambling.

Below are links to the govtrac.us website for pending legislation referred to in the Report:

  • HR 2046 (Internet Gambling Regulation and Enforcement Act)
  • HR 2607 (Internet Gambling Regulation and Tax Enforcement Act)
  • HR 2610 (Skill Game Protection Act)

Internet-Ordained Clergy, Online Gambling, and the Regulation of Online Video

A few items that caught my eye last week-

  • According to the National Law Journal, “Internet-ordained ministers are legal in all 50 states, except for certain counties in Virginia, Pennsylvania and North Carolina, where the practice has faced legal challenges in the past decade.” I wonder how those counties feel about weddings officiated by Rolling Stone-ordained clergy. Anyway, check out this NLJ article highlighting some of the risks presented by Internet ministers.
  • CNET’s News Blog featured a detailed post on the ins and outs of online gambling, including the 2006 Unlawful Internet Gambling Enforcement Act, lobbying efforts to scale back the law, and the purported benefits of playing poker.
  • The Progress & Freedom Foundation’s Adam Thierer shares his concerns relating to some current attitudes toward the regulation of online video, as evidenced by a recent 463 Communications/Zogby International survey. Adam’s post links to the survey, which includes a number of other ‘interesting’ findings.

Regulation of Online Intrastate Gambling

Earlier this week Congressman Tom Feeney (R-Fla), in written materials supplementing previous floor remarks, addressed the 2006 Unlawful Internet Gambling Enforcement Act and what he views as a threat to that law:

[L]ast year, I cosponsored legislation with Congressman Bob Goodlatte to help stop the widespread growth of gambling over the internet. Though Federal law already prohibits gambling over telephone wires, the passage of this legislation was necessary to maintain the original intent of the law while also bringing it up to speed with the explosion of current and future technology. However, this update of the law made clear that it would only affect interstate commerce, respecting the rights of states by leaving to them the decision whether and how to regulate gambling within their own borders. New legislation before the Financial Services Committee attempts to undo all of this previous work, instead granting the federal government the expansive and exclusive right to regulate all online gambling. This new legislation would represent the first time in history that the Federal Government would be given power to issue gambling licenses, and it marks a significant shift away from allowing states to determine for themselves what type of policy is best. Proponents of this legislation state that the bill offers states the right to “opt out” of this regulation, but the truth is that the states already have the right to determine their own policy towards gambling without any broader federal regulation that threatens to undermine their control over licensing standards and enforcement actions.

I haven’t seen the bill the Congressman is referring to, and I’m not expressing any opinion here about gambling, or whether it should be legal. But I am scratching my head about the concept of online intrastate gambling.

Is it technologically feasible for a wagering site based in Illinois to only allow persons physically located in Illinois to place bets? I suppose it could be tried, but something tells me that lots of determined people would find ways around such a restriction, which would presumably invite federal attention.

Perhaps the bill’s opponents are instead worried about states losing out on tax revenues that could one day be extracted from online gambling sites purportedly operating exclusively within a single state?

If anyone is familiar with the proposed legislation, I’d be interested in your opinion.

Online Bounty Hunting

Addressing the House of Representatives earlier this week, Congressman Ted Poe (R-Texas), founder and co-chair of the Congressional Victim’s Rights Caucus, announced that “high-tech bounty hunting is now occurring in the United States.” He went on to laud the role of the Internet (mentioning LexisNexis in particular) in protecting children from convicted sex offenders:

The Internet allows law enforcement to track down known sex offenders in the United States. States can find convicted sex offenders that must register under the new Adam Walsh Child Safety Act. Failure of a child molester to register is a Federal crime.

So these convicted sex offenders who do not register with local authorities are now being arrested using LexisNexis Internet tracking.

Florida police were hunting for a known sex offender. They traced him to Illinois, but Illinois officials claimed the offender was dead. The Internet search tools tracked the child molester to Indiana, where he was arrested for absconding and for failure to register as a known sex offender.

Studies show that convicted sex offenders often remain dangerous and become recidivists once released from prison. Sex offenders are now being held accountable for failing to register; law enforcement is informed of known sex offenders’ whereabouts; future recidivism is prevented; and, meanwhile, children are safer because of high-tech bounty hunting.

Of course law enforcement and others have been making such use of online resources for several years now. But with all the recent headlines touting the “evils” of certain Internet destinations, I thought Congressman Poe’s positive remarks merited some attention here.

Pull the trigger, yes. Click the mouse, no. The WSJ on Internet hunting laws.

I am not a hunter, and can’t say I really have any interest in becoming one. But an article that appeared earlier this month on the front page of the Wall Street Journal – “Internet Hunting Has Got to Stop – If It Ever Starts” – caught my attention.

Zachary M. Seward reports that “33 states have outlawed Internet hunting since 2005, and a bill to ban it nationally has been introduced in Congress.” Furthermore, he notes that California has banned Internet fishing (see reference to “Computer Assisted Remote Fishing” at the bottom of page 6).

What is Internet hunting you ask? In theory my understanding is that for a fee, one accesses a website featuring a live, outdoor video feed. When a deer or other game wanders into the frame on your monitor, you can – with a mouse click – cause a live round to be fired from a rifle affixed to the camera. I say “in theory” because, as the article highlights, there do not appear to be any such sites presently operating (although this hasn’t stopped a majority of states from prohibiting the practice).

Researching the subject earlier today, I see that just last week Illinois became the 34th state to ban the practice. Also, the federal bill referred to in the WSJ article, intended to ban “computer-assisted remote hunting,” was referred to the House Judiciary Committee earlier this summer.

This post is not intended to judge the values of hunters or animal rights folks, nor opine as to whether hunting should be legal. But there is no disputing that in some states, at certain times of the year, certain birds and mammals can be hunted legally. So how can it be that some of those very same states have now acted to prohibit the practice when accomplished remotely via the Internet?

Again, I’m not a hunter, but I would think that issues relating to safety, licensure, permits, fees, reporting, quotas, disposal, etc. could be addressed in a narrower fashion. Does Internet hunting somehow give the hunter more of an advantage/put the prey at more of a disadvantage, as compared to traditional hunting? Is Internet hunting somehow cruel in a way that traditional hunting is not? Or maybe this has nothing to do with the merits, and is instead a purely political development.

I would be interested in hearing your opinions on these issues.