By: Karl Kronenberger

The law firm of Kronenberger Rosenfeld, LLP filed a class action lawsuit against U-Haul International, Inc. on May 11, 2012.  The case is entitled, Mary Bottorff v. Americo and U-Haul International, Inc., District Court for the Eastern District of California, Case No. 2:12-at-00701.  This new class action lawsuit is filed in the wake of an FTC action filed against U-Haul, entitled, In the Matter of U-Haul Int’l Inc. and AMERCO, FTC File No. 081-0157.  The FTC alleged that between approximately September 2006 and September 2008 U-Haul engaged in an unlawful effort to conspire with their competitors regarding the price of one-way truck rentals.

The new California class action complaint alleges that U-Haul’s unlawful efforts to collude, as detailed previously by the FTC, substantially increased the price of one-way truck rentals nationwide, including in the State of California, thus causing damages to California plaintiff Mary Borttorff and the members of the class, in violation of California law.  The new class action lawsuit defines the “Class” as, “all persons who purchased one-way truck rentals from Defendants for transportation to, from or within the State of California between September 2006 and September 2008.  A copy of the new class action complaint is available here.

The firm is still actively investigating U-Haul in other states and encourages victims of U-Haul’s unfair pricing policies to contact the firm through our online contact form available here, or by calling the firm at (415) 955-1155, ext. 120.

By Ginny Sanderson

Pinterest and Copyright Infringement  

Along with friending, liking, Digging and tweeting, many social media users have now added “pinning” to their daily to-do lists.  According to a recent publication by Experian Marketing Services entitled “The 2012 Digital Marketer: Benchmark and Trend Report,” during the past several months, Pinterest has traveled an incredible path from niche-market obscurity to the third-most visited social networking site in the United States.  Pinterest allows users to express themselves through a virtual bulletin board of images and articles that they have collected, “pinned,” and shared with their followers, who can then “re-pin” the same content, thereby expressing approval of the original pinner’s tastes in music, fashion, literature, food, and so forth.

As Pinterest gains momentum, however, many questions on the legality of pinning content have surfaced, particularly with respect to copyright infringement.   These questions have incited rampant fear among pinners and concern among Internet lawyers, about the possible repercussions of their use of Pinterest, causing even The Wall Street Journal to ask “Is Pinterest the Next Napster?”  The most prevalent legal concerns are divisible into two camps: (1) concerns about inadvertently committing copyright infringement on Pinterest, and (2) concerns about having one’s own copyrights infringed through Pinterest.

Avoiding Copyright Infringement on Pinterest

It is important to note that Pinterest is not the first website that allows users to upload content and, therefore, copyright infringement concerns are not unique to Pinterest. Internet users should know that anytime they upload content to a website—or, even more importantly, copy content from one Internet location to another—that they may expose themselves to a copyright lawsuit.   Our experienced Internet attorneys recommend just a few examples of simple precautions that, if taken, can help avoid the risk of inadvertent copyright infringement.

1)      Determine the content’s source.  An image taken or created by the user is the safest thing to upload (although even then it may contain trademarked, copyrighted, or other material that make it unsuitable for pinning).  If the content is not the user’s own, it should be traced back to its source to determine whether the source permits pinning, such as with a “Pin it” button.

2)      Ask permission.  If the content’s source does not have a “Pin it” button or other clear indication on its website that pinning or reposting is allowed, then permission should be asked before pinning.  Such permission can be obtained through a casual email exchange with the source through the contact information displayed on its website.

3)      Remember that there is no “safety in numbers” on the Internet.  The lasting lesson of Napster is that Mom’s advice that “just because everyone else is doing it, doesn’t mean you have to” is well-heeded on the Internet.  A meme or pin that has been liked or re-pinned numerous times is not infringement-free by virtue of its popularity.  Internet users should not rely on the statements of other pinners that a particular item is pinnable, but should conduct their own investigation into the content’s source.

Protecting Copyrights on Pinterest

Pinterest can serve as a valuable and low- or no-cost marketing tool for artists, crafters, writers, and other businesses of any size.  The alacrity with which large retailers have added “Pin it” buttons to their websites is a testament to this fact.  However, many small businesses and sole proprietors have expressed concern that, by permitting images of their work to be pinned on Pinterest, they are permitting Pinterest or its users to reproduce their work.

The primary cause of this concern is Pinterest’s website Terms of Service, which provide, among other things, that by uploading content to Pinterest, the user grants Pinterest “a non-exclusive, royalty-free, transferable, sublicensable, worldwide license to use, display, reproduce, re-pin, modify (e.g., re-format), re-arrange, and distribute” the content.  Some users have interpreted this provision as permitting Pinterest or its users to produce a hard copy of the content—for example, a photographer might worry that, by pinning a photograph, other users will be able to print out that photograph for display without purchasing it from the photographer.

Importantly, such a provision is not unique to Pinterest and, from a legal perspective, is necessary in order to protect Pinterest against copyright infringement claims from its own users.  A review of the terms of any website that allows users to upload content—such as Facebook, Flickr/Yahoo, and Craigslist— will turn up a similar clause.

That said, Pinterest users have available several tools to protect against infringement.  The most obvious is that the user can disable re-pinning for a particular image, with the downside being that doing so could reduce the image’s exposure on Pinterest.  Another option is to ensure that all images are uploaded with a resolution of 72 dpi—which reads fine on a computer monitor but is heavily pixilated when printed out as most printed materials have, at a minimum, 300 dpi.  Similarly, watermarks on the image discourage both printing and copying for use elsewhere on the Internet.  And, of course, the best protection against copyright infringement, whether on Pinterest or not, is the registration of the copyright through the United States Copyright Office, which is necessary in order to file suit against an infringer.

By Jim Weixel

California’s Silicon Valley is the hub of the world’s technology industry. Every facet of the hardware and software industries finds its roots in the Bay Area. Lately, however, information management and data storage services have come to the forefront of the tech industry, making it possible for users to operate anywhere in the world while their data – and often the applications that use it – to be based in the “cloud,” accessible from anywhere, rather than residing on a user’s computer.

Like the more traditional areas of the tech industry, cloud computing and data storage find their home in the Bay Area as well. Silicon Valley is home to some of the online storage industry’s largest players. Even a number of domain registrars – the nerve centers of the Internet itself – are located in the Bay Area. A substantial portion of the Internet’s data thus resides in or flows through a server or other storage facility in the Bay Area at some point or another.

With that data, of course, comes a steady stream of parties interested in obtaining it for litigation purposes. Given the truly ubiquitous nature of the Internet, discovery requests can come from literally anywhere. The requests can involve something as weighty as a foreign government seeking to track down the ill-gotten gains of a corrupt ruler, or as mundane as a litigant in a foreign court pressing a defamation claim arising out of an online forum hosted on a local server. Since the Bay Area is the location of many of the world’s hosting and domain registry services, foreign litigants are winding up on our Northern California doorstep more and more in their search for evidence.

Typically, foreign litigants resort to a federal discovery statute, 28 U.S.C. § 1782, to gain access to information located in the United States.  The statute is labeled, “Assistance to Foreign and International Tribunals and to Litigants before such Tribunals.”  That statute allows a party involved in a foreign proceeding to petition a federal court for a subpoena for information or the testimony of witnesses located in the court’s district. As the federal court covering the Bay Area, the U.S. District Court for the Northern District of California sees a constant stream of requests for subpoenas to web hosting services, web-based email services and social networking services.

The statute provides some protection for evidence that is privileged, and also allows the federal court to implement procedures and protections that would be applicable in the courts of the jurisdiction where the proceeding is pending. However, in practice, those discretionary protections are not usually applied by the local courts. Instead, foreign litigants are typically granted a wide degree of latitude in seeking and obtaining information hosted locally, notwithstanding the fact that the laws and procedures of their own courts would not have allowed access to the information.

Whether you’re looking to use 28 U.S.C. § 1782 to get documents for a foreign case, or you’re trying to keep your own information out of the hands of an overseas litigant, it is essential that you retain counsel familiar with the tools available under U.S. and foreign law to protect your interests. As leaders in the Internet litigation and privacy arena, the Internet attorneys at Kronenberger Rosenfeld, LLP are uniquely prepared to provide you with the best possible representation in this arena. The firm has handled these international discovery issues under 28 U.S.C. § 1782 in the past, at both the trial court and appellate level, and we’d be happy to bring that experience to bear for you.

For more information about how Kronenberger Rosenfeld can assist you with 28 U.S.C. § 1782, contact Jim Weixel at jim@KRInternetLaw.com or at (415) 955-1155, extension 119.

By Jeff Rosenfeld

Social media success Twitter is now taking measures to curb the amount of spam plaguing its service. After spending $700,000 in anti-spam efforts, Twitter is taking legal action by suing several companies and individuals that have developed and/or distributed software designed to facilitate abuse of the Twitter platform.  Twitter has also named defendants who allegedly operate numerous automated Twitter accounts designed to trick Twitter users into clicking on links to illegitimate websites.  The defendants named in the lawsuit are Skootle Corp., Web Solutions, Justin Clark dbaTweetbudyy.com, James Kester, Jayson Yanuaria, James Lucero, and Garland E. Harris.

In its complaint, Twitter alleges that its service has become an unwilling platform for several categories of abusive conduct, including unsolicited commercial email.  Most significantly, Twitter users have received unsolicited tweets (known as spam tweets) from accounts created for specific purpose of sending such unsolicited tweets.  Twitter asserted four claims for relief and seeks hundreds of thousands of dollars in damages.

Twitter filed its lawsuit on April 5, 2012 in the United States District Court for the Northern District of California, and the case has been assigned to the Honorable Laurel Beeler.

Twitter is not the first social media company to address spam through legal channels.  Companies such as Facebook and Google have also filed spam-related lawsuits based on the misuse of their social-networking services.

Spamming has become a genuine concern for all users of social media and mobile networks.  Our firm of experienced Internet attorneys has extensive experience with Internet Law generally and Spam Law specifically.

In a recent pretrial victory, Kronenberger Rosenfeld, one of the law firms representing the plaintiff in a consumer class action, overcame multiple motions to dismiss.

Chang, on behalf of various classes, brought a complaint against Defendants Wozo LLC, Tatto, Inc., and Adknowledge, Inc. for an alleged bait-and-switch scheme based on advertisements jointly created by the Defendants and advertised to individuals playing internet games.  Defendants ran a promotion offering a “free” poster and points or other benefits to be used in various online games for a mere 99-cent shipping fee.  To Chang’s surprise, he later learned he had been enrolled, without his knowledge or consent, in a poster club with a monthly membership fee of $29.95.

Defendants moved to dismiss Chang’s complaint for lack of subject matter jurisdiction, lack of personal jurisdiction, and failure to state a claim upon which relief can be granted. Judge Denise J. Casper of the District of Massachusetts denied the Defendants’ motions.

Specifically, Judge Casper ruled that an initial settlement offer made by one Defendant to Chang did not afford Chang all the relief he could obtain if he were to prevail at trial.  Judge Casper also ruled that the Court had personal jurisdiction over Adknowledge.  Regarding Defendants’ contentions that Chang did not state a claim upon which relief could be granted, Judge Casper decided that Chang did allege valid claims under Massachusetts consumer protection laws, M.G.L. c.93A, as well as the Electronic Funds Transfer Act, thus permitting the case to move forward on all counts.  Kronenberger Rosenfeld, LLP, is one of the firms representing Chang and the putative class.

Chang v. Wozo LLC, et al., Case No. 11-10245-DJC (D. Mass.)

Click here for a copy of the order denying the motions to dismiss.

Internet law firm, Kronenberger Rosenfeld, filed a class action lawsuit against Wise Media, LLC, alleging unlawful text spamming using the name lovegenietips .The class action complaint alleges that Wise Media, a limited liability company operating out of Grayson, Georgia, violated federal telephone consumer protection laws when it sent unsolicited commercial texts to consumers’ mobile phones without the consumers’ knowledge or consent.  The texts referred to a website located at lovegenietips.com  The complaint further alleges that Wise Media then wrongfully profited from its misconduct by enrolling consumers in a monthly subscription plan for “flirting tips” and charging the consumers $9.99 per month through their cell phone carriers.  Finally, the complaint alleges that Wise Media violated California laws by engaging in unlawful, unfair, and fraudulent business practices.  All of this conduct, the complaint alleges, was undertaken without the consumers’ knowledge or consent.

The complaint was filed in the Northern District of California on March 9, 2012 and has been assigned to the Honorable Maria-Elena James.  The lawsuit includes claims for violation of the Telephone Consumer Protection Act, conversion, and California Business and Professions Code section 17200.

Humble v. Wise Media, LLC, Case No. 11-1203-MEJ (N.D. Cal.)

Click here for a copy of the complaint.

The Federal Trade Commission’s recently-amended Business Opportunity Rule (the “BOR”), which imposes new disclosure requirements and a waiting period on business opportunity products, or “bizopps,” goes into effect March 1, 2012.  Under the BOR, bizopp sellers are required to provide potential customers with a written disclosure statement containing the following information:

-          Key information about the seller, including a list of any legal actions the seller –including any affiliated person or company—has been involved in;

-          Evidence supporting any earnings claims made about the bizopp;

-          The material terms of any cancellation or refund policy; and

-          A list of all other customers who purchased the bizopp within the last three years.

Two copies of disclosure statement must be provided to the customer at least seven days before the purchase.  The consumer is required to return a signed copy of the statement to the seller and retain another for the consumer’s own records.

Although the new requirements are clearly aimed to reduce the prevalence of bizopp fraud, they will undoubtedly increase the operating expenses and record-keeping responsibilities for vendors of legitimate business opportunities.  In an effort to mitigate this burden, the FTC has included several exceptions in the BOR that serve to exclude several types of bizopps from having to comply with the new requirements.

Kronenberger Rosenfeld regularly provides preventative counseling on FTC and related compliance matters, as well as FTC litigation defense.  If you need to determine whether your business opportunity offer complies with the FTC’s new regulations, you contact us through our website or at 415-955-1155, ext. 120.

Judge Robert L. Hinkle of the Northern District of Florida denied Plaintiff Ned Newcomer’s motion for class certification.  Kronenberger Rosenfeld represented Defendant 1021018 Alberta, Ltd. doing business as Just Think Media (“JTM”) in this action.  Kronenberger Rosenfeld opposed class certification on several grounds, including that Newcomer’s claims were not typical of the class.

Newcomer brought a complaint seeking class certification against JTM, alleging that he purchased a product from JTM based on misleading disclosures on JTM’s website.  Newcomer filed a motion seeking to certify a nationwide class of all consumers of JTM’s product.  JTM opposed the motion, arguing that Newcomer did not satisfy the prerequisites under Federal Rule of Civil Procedure 23.  The Court ruled in JTM’s favor.

Specifically, Judge Hinkle denied Newcomer’s motion for class certification based on his failure to prove any of the four requisite elements at issue: numerosity, typicality, predominance of common questions, or superiority.  Among other holdings, the Court specifically sided with JTM in its argument that pricing disclosures at the top of its webpage, which Newcomer does not remember reviewing, prevented a finding that Newcomer’s claims were typical of the class or that common questions predominated.  Accordingly, class certification was denied, and a putative class action that initially sought millions of dollars in alleged damages was reduced to a worth of less than $100.     

Newcomer v. Integraclick Inc, et al, Case No. 4:10-cv-00477-RH-WCS.

Click here for a copy of Judge Hinkle’s decision.

Kronenberger Rosenfeld, LLP continues to fight for the rights of millions of bank customers with the recent filing of a consolidated class action complaint against Zions Bancorporation and Zions First National Bank.

The complaint alleges that prior to October 2010, Zions Bancorporation and at least eight of its subsidiary banks intentionally defrauded their customers by manipulating the order in which debits to their accounts were processed with the purpose of maximizing the banks’ overdraft fees.  The complaint alleges that the following subsidiaries of Zions Bancorporation that engaged in this misconduct include defendant Zions First National Bank, and California Bank and Trust, Nevada State Bank, the National Bank of Arizona, Amegy Bank of Texas, Vectra Bank Colorado, the Commerce Bank of Oregon, and the Commerce Bank of Washington.

The complaint alleges that the banks’ fraud worked as follows:  the banks would re-order their customers’ daily debit transactions to be processed from highest amount to lowest amount.  By doing this re-ordering, the banks were able to maximize the number of overdraft fees they could impose on their customers.  As an example, if a customer started with a beginning daily balance of $100, and made three debit purchases of $30, $50, and $90, the bank would re-order the debits so that the $90 debit was processed first, then the $50 debit, and then the $30 debit.  When the debits were processed in this high-to-low order, the customer would incur two overdraft fees—i.e. for both the $50 and $30 debits.  By comparison, if the bank had processed the transactions in low-to-high order, the customer would only have incurred one overdraft fee—i.e. for the $90 debit.  As the complaint alleges, the banks’ disclosure of this practice was vague at best, often buried in boilerplate language in the middle of a long agreement, and sometimes not disclosed at all.

Prior to the filing of similar class actions, many other banks employed similar debit re-ordering scams.  Only in light of recent, large-scale class action litigation have banks changed their practices.    For example, in a case challenging Wells Fargo’s debit re-ordering, Judge William Alsup of the U.S. District Court for the Northern District of California decided that Wells Fargo’s policies constituted “unfair and deceptive business practices,” and ordered Wells Fargo to pay restitution to its customers in the amount of $203 million.  Banks were also the target of a multi-district lawsuit involving Bank of America (which BOA agreed to settle for $410 million) and JP Morgan Chase (which just announced a settlement of $110 million), among other banks.

If customers believe they were the victims of the re-ordering practices of Zions Bancorporation or its subsidiaries, they should contact Kronenberger Rosenfeld to discuss their options.

Barlow, et al. v. Zions Bancorporation, et al., Case No. 2:11-cv-00929-BSJ (D. Utah)

Click here for a copy of the complaint.

Kronenberger Rosenfeld has obtained two important court orders to assist the victim of anonymous online defamation in identifying the anonymous defendants. 

Kronenberger Rosenfeld, representing the plaintiff, filed a John Doe lawsuit against anonymous defendants.  The plaintiff alleged that the anonymous defendants had posted defamatory statements about him on a Facebook account and distributed those defamatory statements to his friends and family.  After filing the lawsuit, Plaintiff obtained a court order allowing expedited discovery and served a subpoena on Facebook.  In response to the subpoena, Facebook identified four IP addresses that had been used to post the defamatory comments.  Three of the IP addresses are owned by Sprint and the fourth is owned by Time Warner Cable.

The plaintiff served subpoenas on Sprint and Time Warner to obtain the account information associated with these IP addresses.  In response to the subpoena to Time Warner, a pseudonymous party, “Jane Doe,” moved to quash the subpoena.  In response to the subpoena to Sprint, Sprint responded that it could not produce the requested information without a court order or consent from the consumer under California Code of Civil Procedure section 1985.3 and Public Utilities Code section 2891.  Kronenberger Rosenfeld, on behalf of the plaintiff, moved the Court to enforce both of the subpoenas.

On December 13, 2011, the San Francisco Superior Court issued two orders allowing the plaintiff to enforce both of the subpoenas.  First, the Court issued an order denying Jane Doe’s motion to quash the subpoena to Time Warner.  The Court found that the plaintiff was entitled to the discovery at issue, and that Jane Does’ objections were without merit.  Second, the Court issued an order requiring Sprint to respond to the subpoena.

These are two important orders regarding discovery into the sources of anonymous online defamation.

Turner v. Does, Case No. CGC-11-512960 (San Francisco Superior Court).