The legal mind craves an orderly legal universe-a seamless web of rationality-in which every word in a statute or in a contract or in a judicial opinion has a unique and indispensable function and in which there are no gaps and no redundancies. Yet there are loads of gaps and redundancies in the law.Winstead v. J.C. Penny Co., Inc., 933 F.2d 576 (7th Cir. 1991).
Wednesday, November 28, 2012
A little bit of reassurance...
...that I stumbled upon today, care of Judge Richard Posner:
Thursday, October 11, 2012
Schrödinger's Trade Secret
When is a trade secret not a trade secret? When the issue is one of preemption.
Specifically, section 767(a) of Georgia's Trade Secret Act (the "GTSA") preempts "conflicting tort, restitutionary, and other laws of this state providing civil remedies for misappropriation of a trade secret." The question arises, what does the term "trade secret" as used in this section mean? The answer, it turns out, is broader than the GTSA's actual definition of a "trade secret."
Section 761(4) of the GTSA defines a "trade secret" as: 1) information; 2) which is not commonly known by or available to the public; 3) which derives economic value from not being generally known to or ascertainable by others; and 4) which is the subject of reasonable efforts to maintain its secrecy. In my mind, these elements divide into two different categories. The first looks to the nature of the thing itself and requires that it be "information," with the quintessential example being a customer list. The last three elements, however, look to circumstances extrinsic to the thing itself -- namely, whether the thing is kept secret.
Obviously, the GTSA prempts claims for misappropriation of things that satisfy this definition of a trade secret. However, what about things that constitute "information" under the first element but do not satisfy one or more of the other prongs? For example, assume a salesman maintains a customer list but takes no measures to maintain its secrecy. Could the salesman sue for conversion of that list?
For the past few years federal courts in Georgia have held no, reasoning that "it would make little sense to go through the rigamarole of proving information was truly a trade secret if a plaintiff could alternatively plead claims with less burdensome requirements of proof."1 In other words, keep your information a secret or risk losing any claims based upon its misappropriation. This approach sounds right to me, although some states take the opposite tact.
Earlier this year, the Georgia Supreme Court chimed in and adopted this reasoning. In Robbins v. Supermarket Equip. Sales, LLC, the plaintiff filed suit under the GTSA alleging that the defendant misappropriated plaintiff's tattoo drawings.2 However, the trial court subsequently determined that the drawings did not satisfy the definition of a trade secret under § 761(4) because the plaintiff failed to take reasonable efforts to maintain their secrecy. Thus, plaintiff's trade secret claim failed. Nevertheless, the trial court granted injunctive relief pursuant to O.C.G.A. § 9-5-1.3
The Supreme Court reversed, holding that the GTSA preempted the § 9-5-1 claim for injunctive relief. "For the GTSA to maintain its exclusiveness, a plaintiff cannot be allowed to plead a lesser and alternate theory of restitution simply because the information does not qualify as a trade secret under the act."4 In other words, though the drawings were not a "trade secret" under § 761(4), they were a "trade secret" under the preemption provision of § 767(a).
Despite the internal inconsistency this conclusion creates within the language of the GTSA, it is a necessary result if one accepts the conclusion that the legislative purpose of preemption is to provide for the free-flow of information that does not amount to a "trade secret."5
That said, the Robbins opinion is not without ambiguity. Specifically, the Court described "the key inquiry [as] whether the same factual allegations of misappropriation are being used to obtain relief outside the GTSA." Thus, the Court opened up an argument that preemption occurs only where the plaintiff actually asserts both a GTSA claim as well as another claim. However, such an approach elevates form over substance. Whether a plaintiff actually asserts a trade secret claim should be irrelevant. Otherwise, plaintiffs could get around preemption simply by not asserting a GTSA claim, which, if they know their GTSA claim is flawed, might not be a big deal. Thus, in my view, if a plaintiff asserts a claim for misappropriation of "information" that could have constituted a trade secret had the plaintiff protected it as such, then such a claim should be preempted, regardless of whether the plaintiff actually asserts a GTSA claim.
1 Diamond Power Intl. v. Davidson, 540 F.Supp.2d 1322, 1343 (N.D.Ga.2007).
2 722 S.E.2d 55 (2012).
3 Section 9-5-1 provides that "equity, by a writ of injunction, may restrain proceedings in another or the same court, a threatened or existing tort, or any other act of a private individual or corporation which is illegal or contrary to equity and good conscience and for which no adequate remedy is provided at law."
4 Robbins, 722 S.E.2d 55.
5 Diamond Power Intl., 540 F.Supp.2d at 1343.
Specifically, section 767(a) of Georgia's Trade Secret Act (the "GTSA") preempts "conflicting tort, restitutionary, and other laws of this state providing civil remedies for misappropriation of a trade secret." The question arises, what does the term "trade secret" as used in this section mean? The answer, it turns out, is broader than the GTSA's actual definition of a "trade secret."
Section 761(4) of the GTSA defines a "trade secret" as: 1) information; 2) which is not commonly known by or available to the public; 3) which derives economic value from not being generally known to or ascertainable by others; and 4) which is the subject of reasonable efforts to maintain its secrecy. In my mind, these elements divide into two different categories. The first looks to the nature of the thing itself and requires that it be "information," with the quintessential example being a customer list. The last three elements, however, look to circumstances extrinsic to the thing itself -- namely, whether the thing is kept secret.
Obviously, the GTSA prempts claims for misappropriation of things that satisfy this definition of a trade secret. However, what about things that constitute "information" under the first element but do not satisfy one or more of the other prongs? For example, assume a salesman maintains a customer list but takes no measures to maintain its secrecy. Could the salesman sue for conversion of that list?
For the past few years federal courts in Georgia have held no, reasoning that "it would make little sense to go through the rigamarole of proving information was truly a trade secret if a plaintiff could alternatively plead claims with less burdensome requirements of proof."1 In other words, keep your information a secret or risk losing any claims based upon its misappropriation. This approach sounds right to me, although some states take the opposite tact.
Earlier this year, the Georgia Supreme Court chimed in and adopted this reasoning. In Robbins v. Supermarket Equip. Sales, LLC, the plaintiff filed suit under the GTSA alleging that the defendant misappropriated plaintiff's tattoo drawings.2 However, the trial court subsequently determined that the drawings did not satisfy the definition of a trade secret under § 761(4) because the plaintiff failed to take reasonable efforts to maintain their secrecy. Thus, plaintiff's trade secret claim failed. Nevertheless, the trial court granted injunctive relief pursuant to O.C.G.A. § 9-5-1.3
The Supreme Court reversed, holding that the GTSA preempted the § 9-5-1 claim for injunctive relief. "For the GTSA to maintain its exclusiveness, a plaintiff cannot be allowed to plead a lesser and alternate theory of restitution simply because the information does not qualify as a trade secret under the act."4 In other words, though the drawings were not a "trade secret" under § 761(4), they were a "trade secret" under the preemption provision of § 767(a).
Despite the internal inconsistency this conclusion creates within the language of the GTSA, it is a necessary result if one accepts the conclusion that the legislative purpose of preemption is to provide for the free-flow of information that does not amount to a "trade secret."5
That said, the Robbins opinion is not without ambiguity. Specifically, the Court described "the key inquiry [as] whether the same factual allegations of misappropriation are being used to obtain relief outside the GTSA." Thus, the Court opened up an argument that preemption occurs only where the plaintiff actually asserts both a GTSA claim as well as another claim. However, such an approach elevates form over substance. Whether a plaintiff actually asserts a trade secret claim should be irrelevant. Otherwise, plaintiffs could get around preemption simply by not asserting a GTSA claim, which, if they know their GTSA claim is flawed, might not be a big deal. Thus, in my view, if a plaintiff asserts a claim for misappropriation of "information" that could have constituted a trade secret had the plaintiff protected it as such, then such a claim should be preempted, regardless of whether the plaintiff actually asserts a GTSA claim.
1 Diamond Power Intl. v. Davidson, 540 F.Supp.2d 1322, 1343 (N.D.Ga.2007).
2 722 S.E.2d 55 (2012).
3 Section 9-5-1 provides that "equity, by a writ of injunction, may restrain proceedings in another or the same court, a threatened or existing tort, or any other act of a private individual or corporation which is illegal or contrary to equity and good conscience and for which no adequate remedy is provided at law."
4 Robbins, 722 S.E.2d 55.
5 Diamond Power Intl., 540 F.Supp.2d at 1343.
Friday, July 13, 2012
Georgia anti-SLAPP applies to statements made to the State Bar
So says the Georgia Court of Appeals in Jefferson v. Stripling, Civil Case A12A0781.
An attorney represented one of four siblings in a family dispute concerning the distribution of a relative's estate. According to the attorney, the other three siblings:
The trial court held anti-SLAPP applied and dismissed the action without a hearing. The Court of Appeals affirmed the trial court's determination that anti-SLAPP applies: "it is clear that issues before the State Bar involving conduct of attorneys are 'official proceeding[s] authorized by law' and, therefore, covered by the Anti-SLAPP statute." Nevertheless, because the trial court granted the anti-SLAPP motion without holding the required hearing, the matter was remanded.
The plaintiff's claims based upon actual complaints made with the State Bar are obviously doomed. But the other statements are more uncertain. It isn't obvious that statements made to a church qualify for protection as a "statement made in good faith as part of an act in furtherance of the right of free speech or the right to petition government for redress of grievance." That sounds more like making statements for the purpose of disseminating negative information about someone.
An attorney represented one of four siblings in a family dispute concerning the distribution of a relative's estate. According to the attorney, the other three siblings:
- attacked her trade, business and profession by filing several frivolous complaints with the State Bar of Georgia;
- engaged in a slanderous and libelous campaign by making false statements to the State Bar, members of the public, the church, and legal community about her personal life;
- sent written communications, which they knew to be false, to the legal community, civic leaders, churches, and the trial court alleging that she had engaged in unethical and illegal business conduct; and
- held private meetings in order to share false and misleading information with three unnamed state agencies in order to injure her reputation, trade, business and profession.
The trial court held anti-SLAPP applied and dismissed the action without a hearing. The Court of Appeals affirmed the trial court's determination that anti-SLAPP applies: "it is clear that issues before the State Bar involving conduct of attorneys are 'official proceeding[s] authorized by law' and, therefore, covered by the Anti-SLAPP statute." Nevertheless, because the trial court granted the anti-SLAPP motion without holding the required hearing, the matter was remanded.
The plaintiff's claims based upon actual complaints made with the State Bar are obviously doomed. But the other statements are more uncertain. It isn't obvious that statements made to a church qualify for protection as a "statement made in good faith as part of an act in furtherance of the right of free speech or the right to petition government for redress of grievance." That sounds more like making statements for the purpose of disseminating negative information about someone.
Wednesday, June 13, 2012
Some People Will Never Learn...
Proprietor of theOatmeal.com gets a nonsensically hilarious cease & desist letter; turns it into a fundraiser for charity; has thus far raised $150,000(!!) in less than one week. The attorney who sent the cease & desist letter, meanwhile, regresses from oblivious to malicious as he tries to put an end to the fundraiser.
http://digitallife.today.msnbc.msn.com/_news/2012/06/12/12187665-cartoonist-turns-lawsuit-threat-into-100k-charity-fundraiser
P.S.: Really MSNBC, you blur out a crude cartoon of an obese woman in a bikini? Really?
http://digitallife.today.msnbc.msn.com/_news/2012/06/12/12187665-cartoonist-turns-lawsuit-threat-into-100k-charity-fundraiser
P.S.: Really MSNBC, you blur out a crude cartoon of an obese woman in a bikini? Really?
Wednesday, June 6, 2012
Can a website proprietor be held liable for defamatory comments made by visitors to that site?
In the words of Chris Rock, "not really." Regardless of whatever hurdles would exist at the state law level, the Federal Communications Decency Act immunizes such claims by providing that "[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider." 47 U.S.C. 230(c)(1). Further, "[n]o cause of action may be brought and no liability may be imposed under any State or local law that is inconsistent with this section." 47 U.S.C. § 230(e)(3). "Thus, lawsuits seeking to hold a service provider liable for its exercise of a publisher's traditional editorial functions-such as deciding whether to publish, withdraw, postpone or alter content-are barred." Hopkins v. John Doe #1, 2011 WL 5921446 (N.D. Ga. Nov. 28, 2011) (quoting Zeran v. Am. Online, Inc., 129 F.3d 327, 330 (4th Cir. 1997).)
However, courts appear receptive to the possibility that a provider could waive this immunity by liberalizing its terms of service. Green v. America Online, 318 F.3d 465, 471-72 (3rd Cir. 2003). Of course, it would take a colossal act of stupidity (or benevolence) for a provider to implement such a policy.
However, courts appear receptive to the possibility that a provider could waive this immunity by liberalizing its terms of service. Green v. America Online, 318 F.3d 465, 471-72 (3rd Cir. 2003). Of course, it would take a colossal act of stupidity (or benevolence) for a provider to implement such a policy.
Monday, May 7, 2012
Georgia Political Bloggers Sued for Defamation
Before this weekend I had never heard of Rashad Richey, the political director of Georgia's Democratic Party. I had never heard that he had pled guilty to misdemeanor trespass and battery, had been involved in a domestic dispute, or that he had a felony conviction for aggravated assault in 1998 which was wiped from his record under a first-time-offender law. I had never heard of Georgia Politics Unfiltered blog, yet alone its report that that Richey has been arrested 12 times since 1998. And I had certainly never seen an apparent mug shot of Richey in a blood-stained t-shirt.
But now I have, and it's all because Richey filed a defamation action against the proprietors of Georgia Politics Unfiltered and Blog for Democracy, arising from allegations that these blogs labeled him a "criminal" and a "recidivist." Richey says he filed this action because, while he admits that he has made "mistakes" in his past, that's where he wants them to stay. Legal obstacles aside, filing a defamation action isn't usually the best way to go about achieving that result. It's the "Streisand effect" in action.
But now I have, and it's all because Richey filed a defamation action against the proprietors of Georgia Politics Unfiltered and Blog for Democracy, arising from allegations that these blogs labeled him a "criminal" and a "recidivist." Richey says he filed this action because, while he admits that he has made "mistakes" in his past, that's where he wants them to stay. Legal obstacles aside, filing a defamation action isn't usually the best way to go about achieving that result. It's the "Streisand effect" in action.
But apart from that, the legal obstacles facing Richey in this lawsuit are substantial enough that I can't see it ending well for him. First, there's the issue of the truth of the accusations. The complaint reads as though Richey isn't contesting the truth of the misdemeanors and the expunged felony, but instead appears to be teeing up the following argument: Defendants called Richey a "recidivist"; the Georgia recidivist statute provides penalties for persons who commit repeated felonies; Richey doesn't have a conviction for a felony on his record; therefore, the statement that Richey is a recidivist is false.
The problem with this is that it's a much more myopic approach than defamation law calls for. Or, put another way, defamation does not nitpick. "In determining whether a statement is false, defamation law overlooks minor inaccuracies and concentrates upon substantial truth. A statement is not considered false unless it would have a different effect on the mind of the viewer from that which the pleaded truth would have produced." Austin v. Pmg Acquisition, LLC, 278 Ga. App. 539 (2006). Misdemeanors are crimes, and so are past felonies that were expunged. I doubt that a reasonable listener differentiates between felonies and misdemeanors in considering whether someone is a criminal or a recidivist.
Further, and assuming for a second that Richey has to prove "actual malice," then the fact that the defendants were aware of Richey's arrests, misdemeanors, and the expunged felony, almost guarantee that Richey won't be able to prove actual malice. "The actual malice inquiry is based on what the writer knew when he wrote it." Jones v. Albany Herald Pub. Co., Inc., 290 Ga.App. 126 (Ga. App., 2008). The question is whether a "reasonably prudent" person would have entertained serious doubts, given the facts available to them, as to the truth of the statements made. Id. Here, if the issue is simply that the Defendants misunderstood the strict legal definition of the term "recidivism" under Georgia law, then that won't amount to "actual malice." It's sort of a "close-but-not-quite" defense.
For example, in Jones v. Albany Herald Pub. Co., Inc., 290 Ga.App. 126 (Ga. App., 2008), a newspaper ran an article asserting that the defendant was a "convicted felon." While the plaintiff had been charged with a felony, he ultimately plead only to a misdemeanor. The only indication on the face of the indictment that the defendant had plead to merely a misdemeanor was a handwritten notation. The author of the article missed the notation and believed that the plaintiff pled to a felony. Although the article's assertion that the plaintiff was a "convicted felon" was false, the defendant was still entitled to summary judgment on the issue of actual malice. The court determined that the inference the writer made from the face of the indictment was a reasonable one. Thus, the plaintiff could not, as a matter of law, prove that the defendant acted with substantial doubts as to the truth of the statement at issue.
Finally, whether Richey can prove "actual malice" is important because he is in all likelihood a "public official," which triggers that requirement. "The 'public official' designation applies at the very least to those among the hierarchy of government employees who have, or appear to the public to have, substantial responsibility for or control over the conduct of governmental affairs." Rosenblatt v. Baer, 383 U.S. 75 (1966). The rationale for holding public officials to a higher standard of proof in defamation actions is that they have greater access to the press to counter defamation through media channels. As a director of one of the two major political parties in Georgia, Richey would "appear to the public to have substantial responsibility for or control over the conduct of governmental affairs." Richey's complaint even points out that he holds a position of "public trust," a strange admission to make in a complaint that so obviously concerns New York Times v. Sullivan, 76 U.S. 254 (1964). Further, he held a press release to announce his lawsuit, which certainly buttresses the conclusion that he has the ability to counter defamatory statements through the media. And the fact that he's not technically a "government employee" (since he's an employee of the Democratic party of Georgia) is not dispositive, since mere candidates for public office have been deemed to be public officials, despite the fact that they are not "government employees." Monitor Patriot Co. v. Roy, 401 U.S. 265 (1971).
Legally or otherwise, I'd be surprised if this lawsuit garnered anything more for Richey than negative attention.
The problem with this is that it's a much more myopic approach than defamation law calls for. Or, put another way, defamation does not nitpick. "In determining whether a statement is false, defamation law overlooks minor inaccuracies and concentrates upon substantial truth. A statement is not considered false unless it would have a different effect on the mind of the viewer from that which the pleaded truth would have produced." Austin v. Pmg Acquisition, LLC, 278 Ga. App. 539 (2006). Misdemeanors are crimes, and so are past felonies that were expunged. I doubt that a reasonable listener differentiates between felonies and misdemeanors in considering whether someone is a criminal or a recidivist.
Further, and assuming for a second that Richey has to prove "actual malice," then the fact that the defendants were aware of Richey's arrests, misdemeanors, and the expunged felony, almost guarantee that Richey won't be able to prove actual malice. "The actual malice inquiry is based on what the writer knew when he wrote it." Jones v. Albany Herald Pub. Co., Inc., 290 Ga.App. 126 (Ga. App., 2008). The question is whether a "reasonably prudent" person would have entertained serious doubts, given the facts available to them, as to the truth of the statements made. Id. Here, if the issue is simply that the Defendants misunderstood the strict legal definition of the term "recidivism" under Georgia law, then that won't amount to "actual malice." It's sort of a "close-but-not-quite" defense.
For example, in Jones v. Albany Herald Pub. Co., Inc., 290 Ga.App. 126 (Ga. App., 2008), a newspaper ran an article asserting that the defendant was a "convicted felon." While the plaintiff had been charged with a felony, he ultimately plead only to a misdemeanor. The only indication on the face of the indictment that the defendant had plead to merely a misdemeanor was a handwritten notation. The author of the article missed the notation and believed that the plaintiff pled to a felony. Although the article's assertion that the plaintiff was a "convicted felon" was false, the defendant was still entitled to summary judgment on the issue of actual malice. The court determined that the inference the writer made from the face of the indictment was a reasonable one. Thus, the plaintiff could not, as a matter of law, prove that the defendant acted with substantial doubts as to the truth of the statement at issue.
Finally, whether Richey can prove "actual malice" is important because he is in all likelihood a "public official," which triggers that requirement. "The 'public official' designation applies at the very least to those among the hierarchy of government employees who have, or appear to the public to have, substantial responsibility for or control over the conduct of governmental affairs." Rosenblatt v. Baer, 383 U.S. 75 (1966). The rationale for holding public officials to a higher standard of proof in defamation actions is that they have greater access to the press to counter defamation through media channels. As a director of one of the two major political parties in Georgia, Richey would "appear to the public to have substantial responsibility for or control over the conduct of governmental affairs." Richey's complaint even points out that he holds a position of "public trust," a strange admission to make in a complaint that so obviously concerns New York Times v. Sullivan, 76 U.S. 254 (1964). Further, he held a press release to announce his lawsuit, which certainly buttresses the conclusion that he has the ability to counter defamatory statements through the media. And the fact that he's not technically a "government employee" (since he's an employee of the Democratic party of Georgia) is not dispositive, since mere candidates for public office have been deemed to be public officials, despite the fact that they are not "government employees." Monitor Patriot Co. v. Roy, 401 U.S. 265 (1971).
Legally or otherwise, I'd be surprised if this lawsuit garnered anything more for Richey than negative attention.
Monday, April 30, 2012
Court Holds "Liking" on Facebook Is Not Protected Speech
Volokh highlights the flaw in a E.D.VA decision holding that the plaintiff's "liking" of a politician's Facebook page didn't qualify as speech substantive enough to warrant First Amendment protection. As Volokh points out, it's well settled that even "non-verbal" speech is entitled to protection.
One comment in particular made me chuckle, and, I think, struck at the root of the problem concisely: "old judge doesn't understand new heuristics; just wants kids off his lawn." The trial court focused on the fact that "liking" just requires one click of a mouse. But that's overly reductionist. "Liking" is the equivalent to saying, "I want to subscribe to your newsletter." Regardless of the reason for doing so, or the fact that it takes minimal effort to do so, it should certainly count as "speech" under the First Amendment.
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