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Blog: Jack "Out of the Box"

Welcome to Jack "Out of the Box." This is a spin-off of the Firm's InfoLaw Newsletter, much like "CSI: Miami" is a spin-off from "CSI." Except without all the corpses. I plan to update the blog at least weekly. Really. It's not like when I used to promise my mom to clean my room once a week. I'm more mature now. And of course, the InfoLaw Newsletter will continue every two weeks. The blog will feature shorter pieces, and ideally, reader feedback. Should be fun. Oh yeah, and informative.

Page:
  • They Teach Civics In Tennessee, Right?

    Oct 31, 2014


    The Williamson Tennessee County Board of Education has adopted an “Acceptable Use, Media Release and Internet Safety Procedures” policy. It appears to be part of an effort to control student access to inappropriate online content.

    That’s well and good, but according to a piece in Wired the policy may violate the First and Fourth Amendments. In fact, the Tennessee chapter of the ACLU and the Electronic Frontier Foundation have sent a letter to the school board registering their concerns. Among those concerns is the part of the policy that allows school officials to collect and examine any device a student brings to school “for any... school related purpose.”  In other words, “because we feel like it.” 

    That seems to conflict with court decisions which have permitted searches when there are reasonable grounds to suspect a student has broken the law or school rules. And even then, the search has to be “narrowly tailored.” The Tennessee policy is not narrowly tailored by any stretch. 

    I was having dinner last night and talking about going to a grade school and being taught by nuns. 


     
    And while we had no electronic devices, we also had no First Amendment protections. So, not only could Sister demand we empty our pockets, she could whack our knuckles if we were slow about it. But this was a private school, and that was the choice our parents made.

    Public school students, however, have constitutional rights, and they don’t give them up when they walk into the school building (although the Tennessee policy also controls off campus internet use). The good people on the Williamson County School Board may want to take a look at the Constitution and re-think this policy. 

    I know there are politicians in Tennessee who purport to support the Constitution:



    But maybe instead of tilting at windmills, and attacking policies that are constitutional, they could go after real violations. Like this one.  

    Go comment!
  • FTC/FCC Tag Teaming

    Oct 28, 2014


    I spent an inordinate amount of time as a kid watching professional wrestling. It looked like this:




    In my defense, there were only three channels, and Bugs Bunny wasn’t always on. But one of the things I distinctly remember were the tag team matches. These involved teams of two wrestlers who took turns in the ring. They had to tag each other to switch.  Of course, this being pro wrestling, the rules inevitably got bent, and more often than not, two wrestlers wound up pile driving the hapless victim. Great sportsmanship? No.  Great television. Of course.

    And those vintage memories of fat guys in Speedos were more prominent in my mind than normal today as I read this press release from the Federal Communications Commission. According to the FCC, it plans to fine TerraCom, Inc. and YourTel America, Inc. $10 million. Their sin? The companies failed to safeguard personally identifiable information they gathered from customers. The companies stored Social Security numbers, names, addresses, driver’s licenses and other sensitive customer information on “unprotected Internet servers that anyone in the world could access.”    

    The companies stated in their privacy policies that they had in place “technology and security features to safeguard the privacy of... customer specific information from unauthorized access or improper use.” But those promises don’t jive with reality – specifically putting the information on servers available to the world.

    In the FCC’s view, that conduct violates the companies’ statutory duty under the Federal Communications Act to safeguard the data, but also constitutes an “unjust and unreasonable practice.” And that’s where the tag teaming comes into the picture. The Federal Trade Commission has also gone after companies who don’t live up to privacy promises on the theory that the failure to do so constitutes and unfair and deceptive practice under the Federal Trade Commission Act. The FCC is apparently adopting a similar approach.

    It is of course worth noting that Congress has issued no statutory authorization for the FTC or the FCC to be privacy police. And the Wyndham Hotel chain is  in federal court fighting the FTC’s ability to regulate in this area. Don’t be surprised if there is a similar challenge to the FCC’s jurisdiction.  After all, the tag team concept works both ways!

    Go comment!
  • Helicopter Parents And Social Media

    Oct 22, 2014


    I was a guest on the Scott Sloan show on WLW 700 yesterday. We talked about a recent case in Georgia involving a 13 year old cyber bully named Dustin. This kid decided it would be fun to create a false Facebook profile of a fellow seventh grade girl. Dustin knew what he was doing. He posed as the classmate to create a new Facebook account, using a Yahoo e-mail address. For the profile photo, he used a photo that he had taken of the classmate at school, after altering it with a “Fat Face” application. 

    But that was just the start. Dustin added information to the unauthorized profile, which included racist viewpoints and a homosexual orientation. He also caused the phony person to issue invitations to become Facebook “Friends” to many of Alex’s classmates, teachers, and extended family members. Dustin continued to add information to the phony profile and caused the account to post status updates and comments on other users’ pages. Some of these postings were graphically sexual, racist or otherwise offensive and some falsely stated that Alex was on a medication regimen for mental health disorders and that she took illegal drugs.

    School officials soon discovered that Dustin and another student were behind the scheme. He was punished at school and sort of punished at home. His parents forbade him from seeing his friends after school for one week. But that’s pretty much it. Neither Dustin nor his parents did anything to get the false Facebook information taken down for nearly 11 months. Alex’s parents eventually filed a civil lawsuit for libel and infliction of emotional distress. They named Dustin’s parents as defendants. Shortly after Alex’s parents filed the lawsuit, the Facebook page finally came down.   

    Dustin’s parents filed a motion for summary judgment in the trial court and won. The court concluded the parents were not liable as a matter of law under the circumstances. But the Georgia Court of Appeals reversed that ruling. It held that once the parents were put on notice of the Facebook page, they had a duty to guard against the harm. The issue is foreseeability. If the parents could reasonably foresee that their child’s conduct might harm another person, they had a duty to prevent the harm. 

    In the Georgia appellate court’s view, there were issues of fact around that issue and so it sent the case back for a jury trial. On the radio we discussed what parents are supposed to do in a wired world. The answer is, I suppose, do your best. But once you discover your kid is a cyberbully, you are well advised to clean up the mess he made.  Sooner rather than (11 months) later. And on the front end, take this advice:



    Go comment!
  • Who Let The Dogs Out?

    Oct 21, 2014

    I have posted before about the untenable, hypocritical, condescending, undemocratic practice of the United States Supreme Court to prohibit video-taping oral arguments. Just for clarification, I am opposed to this practice. 

    But to date, my words have fallen on deaf ears. Surprisingly, Justice Scalia has not picked up the phone to discuss this matter with me. Justice Scalia, if you regularly read my blog, please, call me. I’ll make sure it goes right through!

    But if my well-reasoned and thoroughly researched legal arguments don’t do the trick, perhaps ridicule will do the trick. And for that, I defer to John Oliver:



    Come on Supreme Court, can’t you see you’re barking up the wrong tree on this issue?

    Go comment!
  • Body Cameras And The Public's Right To Know

    Oct 16, 2014


    Here’s an article posted today on Cleveland.com about police body cameras. Cleveland police may be equipped with them as soon as next year. I suspect other cities around Ohio and the nation will follow suit. Which for me begs the question, will the footage be a public record? I think the answer is a no brainer. OF COURSE. One of the purposes of equipping cops with body cameras is to ensure accountability. And given that we as members of the public pay their salaries, the police need to be accountable ultimately to us.

    And to be clear. I like the police. I think 99% of the time they act in a responsible and professional manner. So, the overwhelming majority should welcome public accessibility. It will vindicate them in controversial situations. 

    And as for the 1% bad apples? I want to see what they’re up to and make sure they get disciplined appropriately. 

    The Cleveland.com article refers to a decision from the Ohio 12th Appellate District that ruled Ohio Highway Patrol dash cam video footage was exempt from the Public Records Act as a confidential law enforcement record. This logic could lead to other courts concluding that body cam footage is confidential. That would be unfortunate for a host of reasons.

    First, the 12th District is just wrong. Dash cams and body cams don’t disclose any confidential information. They run continuously and record the officer stopping for donuts as well as pursuing a suspect. The Ohio Supreme Court has ruled conclusively that initial incident reports and 911 calls are not investigation reports. They may commence an investigation, but they are recorded before any investigation is under way. Body cameras are the same thing. 

    Second, federal appellate courts have ruled that the public has a First Amendment right to video tape police in action. It goes back to that whole accountability thing I mentioned earlier. So, if I have a First Amendment right to record the activity, it is by definition not confidential. And it seems logical to me that if the First Amendment lets me record, it probably lets me view what someone else has recorded as well.    

    Oh and one more thing about dash cam videos. They’re SO confidential, the Ohio Patrol routinely posts them on their own YouTube Channel:  http://www.youtube.com/user/OSHP/videos. And yes, the sarcasm is intended
    Go comment!
  • SEC Takes Baby Steps Towards Equity Crowdfunding

    Oct 14, 2014

    The SEC recently issued some updated guidance on crowdfunding.  I asked my partner and securities lawyer Richard Schmalzl to weigh in:


    You may have read that the SEC recently made it easier for small businesses to use their own company Web site and social media outlets to raise capital for intrastate equity crowdfunding. Like most developments affecting equity crowdfunding, there are different views about whether the SEC has loosened its standards in a meaningful way. But what really matters to most entrepreneurs looking to raise capital is that the new era of equity crowdfunding is still to come. 

    The key word here is intrastate. For those of you waiting for the SEC to adopt final regulations that would allow equity crowdfunding nationwide, the wait continues with no end in sight. To quickly recap where we stand on that score, the Jobs Act was signed into law on April 5, 2012. It directed the SEC to adopt regulations to legalize equity crowdfunding.  A year and a half later on October 13, 2013, the SEC issued proposed regulations to exempt certain crowdfundings from the registration requirements of the federal securities laws. Those proposed regulations drew much criticism for being too limited, containing too many requirements, and requiring small companies to spend too much money to comply.

    Increasingly frustrated with SEC delays and impediments, equity crowdfunding advocates came up with an innovative solution to facilitate local crowdfunding and effectively bypass federal oversight. The opening arises from the existing, but seldom used, intrastate exemption created by Section 3(a)(11) of the federal securities laws, and related SEC Rule 147. Under that exemption, an issuer is exempt from the federal registration requirements if the issuer offers and sells its securities only to investors who reside in the same state as the issuer.  But there’s a major drawback to the Rule 147 exemption, particularly in tri-state areas like Greater Cincinnati.  The offer of securities must be limited solely  to residents of a single state. Because there is a high risk that an issuer could inadvertently make an offer to a non-resident, the Rule 147 exemption can easily disappear. If so, then all the sales are unlawful, even to those investors who do reside in the intended state.

    Nonetheless, working within the parameters of Rule 147, twelve states, including Indiana, have now adopted their own new laws, rules or regulations to allow equity crowdfunding solely within the confines of their own state, and another fifteen states or so are actively considering similar proposals. Neither the Ohio nor Kentucky legislatures are currently considering similar exemptions, although Representative Steve Riggs of Louisville has publicly supported the notion of introducing a Kentucky equity crowdfunding bill. In states where this concept has caught traction, it’s fueled in large part by state legislators who believe that intrastate equity crowdfunding can help grow small businesses, which produce jobs, in their own state. This is because the business has to be located in and doing substantial business in their state to be eligible to use the exemption. 

    So, you may be asking, what’s the SEC got to do with intrastate equity crowdfunding? It’s because those intrastate exemptions still have to comply with Rule 147. Depending on your point of view, the SEC was either trying to help or throw a monkey wrench at these exemptions when the SEC staff published three Q&As in April 2014.

    On the helpful side, the staff affirmed that Rule 147 permits general advertising or general solicitation in a purely intrastate offering. Since successful equity crowdfunding relies on reaching potential investors who the issuer doesn’t know directly, the ability to publicize the securities offerings is essential.

    On the non-helpful side, the staff said that if an issuer used its own Web site or social media presence to offer securities, that use would likely involve offers to residents outside the particular state in which the issuer does business. That position pretty much undermined the effective use of intrastate exemptions as a practical matter. 

    The good news is that on October 2, 2014 the SEC staff revised its stance on the use of issuer Web sites and social media. The Q&A now goes on to say that issuers could implement technological measures to limit communications to persons whose IP address originates in other states or territories and that offers should include disclaimers and restrictive legends expressly stating that the offer is limited solely to residents of the relevant state. Ultimately, it’s a facts and circumstances test, but at least the door is open for those small businesses fortunate enough to be located in a state that has enacted its own intrastate equity crowdfunding exemption. 

    Go comment!
  • Root, Root, Root Against the Cardinals...

    Oct 13, 2014


    ...if they don't win, well - that would be just fine.

    When the St. Louis Cardinals advanced to the NLCS with their victory over the LA Dodgers, I had several people either razz me or attempt to "console" me. This is  a reflection on my well publicized hatred of that team. I have been accused of having an obsession. I don't know if that's the case, but the fact that people the think I have a problem is probably enough to make me reflect.

    So what is my problem with the Cardinals? It has not been a life long issue. Indeed, one of my earliest baseball memories is Bob Gibson's dominance in the late 60s.

    The 1968 World Series is probably the first one I followed (I was 10) and I rooted for the Cardinals in that contest.



    Certainly the Cardinals' hiring of Tony LaRussa was a seminal moment.

    LaRussa managed the Oakland A's in the 1990 World Series.



    I firmly believe that LaRussa ordered Dave Stewart to bean Billy Hatcher in game 4, because none of the A's staff could get him out. It remains the most bush league move I've seen in my experience. And LaRussa's efforts to enable the steroid use of the Bash Brothers is simply disgraceful.

    To be fair, the fact that the Cardinals have owned the Reds during the last decade is a factor.

    It's annoying. But that factor probably makes me more mad at the Reds than at the Cardinals. But I think my biggest problem with the Cardinals is their smug self righteousness. The whole "we do things the right way" stuff is irritating beyond description. And as I was thinking about this, it occurred to me. The Cardinals are the baseball equivalent of the Omegas from Animal House.  

    Matt Holiday and Yaddi Molina are this generation's Marmalard and Niedemeyer.

    Tony LaRussa of course was Dean Wormer.

    Like the Cardinals, they are smug, arrogant and successful. They are convinced of their moral superiority. I hated them when I saw the movie in 1978. And not just them specifically, but everything they represent. I would not be one bit surprised if Holiday swats rookie teammates while making them scream "thank you sir, may I have another."



    And when the Cardinals play the Giants, I not only have someone to root against, but someone to root for. Because if the Cardinals are the Omegas, the Giants are the Deltas. Check out Brandon Crawford.  

    Any doubt that Yaddi Molina would escort him to the loser corner at the Omega rush party?



    And can't you just see Pablo Sandoval taking a Belushi-like stroll through the cafeteria line?



    I mean, Buster Posey kind of looks like Pinto for crying out loud.

    So don't bother me this week. I'll be busy rooting for degenerates everywhere!
    Go comment!
  • Judgment by Platitudes

    Oct 08, 2014

    My friend Len Niehoff:

    who is not as scary as he looks (and is a great guy, despite his affiliation with the University of Michigan), gave me the heads up on this recent ruling.   

    A New York trial judge issued an order denying access to a videotaped confession given by accused killer Pedro Hernandez. The video was introduced as evidence in a pre-trial hearing. And since pre-trial proceedings in criminal proceedings are supposed to be open to the public, it seems logical that evidence submitted in that proceeding should be publicly available as well. 

    But the judge doesn’t see it that way. In his view, “the recordings will become permanent fixtures on countless websites.” This will make them “available for consumption by anyone with access to a computer, mobile phone, or other device, at any time, day or night.”  And, “[t]his . . .  would almost certainly be fatal to the defendant’s chances or receiving a fair trial.”

    Well, maybe. But the thing is, the standard for determining whether to release public information isn’t an “almost certain” standard. And it’s not supposed to be based on a judge’s gut feel. The public is entitled to the information unless the party resisting production can establish by clear and convincing evidence that the release will prejudice the defendant’s right to a fair trial, and that there is no less restrictive means to prevent the prejudice. The mere fact of pretrial publicity, even pervasive and adverse publicity does not mean the defendant can’t get a fair trial.

    It looks to like Judge Wiley concluded, without any evidence, that the confession would light up the Internet, and further concluded, likely without any evidence, that the publicity would make a fair trial impossible. I suspect he didn’t spend a lot of time thinking about whether careful voire dire or a change in venue would alleviate the “problem.” 

    Unfortunately, it looks like the Judge did what many judges do in this circumstance – assert the platitude about the defendant’s right to a fair trial and call it a day. Too bad.  The public deserves better.

     

    Go comment!
  • Courtroom Victory Not An Illusion

    Oct 07, 2014

    One of the reasons I like my job, besides the fact that they let me do a blog, are the interesting people I get to work with. One of the most interesting is Richard La Jeunesse:

    Besides being a great real estate/environmental lawyer, Richard is a talented magician. I’m talking one of those “how did he do that” caliber guys. So, I couldn’t help but think of Richard when I saw this case

    A federal court in Nevada awarded judgment in favor of Teller, half of the comedy/magic duo “Penn and Teller”:



    Apparently, a Dutch magician named Gerard Dogge created two YouTube videos in which he performed a magic trick “strikingly similar” to one of Teller’s tricks. The illusion is called “Shadows” and it’s been part of Teller’s act for over 30 years. Dogge also offered to sell props used in his trick. Teller sued for copyright infringement and a violation of the Lanham Act. Here it is:



    The case dragged on for two years, largely because Dogge refused to cooperate. And finally the court awarded Teller a default judgment. Teller didn’t get as much money as he wanted – the court awarded $15,000 in statutory damages. But he did come away with a permanent injunction prohibiting Dogge from performing the infringing trick. Teller (and it’s interesting, in the caption of the lawsuit, Teller is identified only by that single name) also asked the court to prohibit Dogge from selling the props. Teller argued that purchasers could themselves perform the trick and continue the infringement. But the court wasn’t willing to go that far. Apparently props don’t infringe copyrights, magicians do.

    I have to say, I’ve not seen a copyright suit over a magic trick before. But given the intent of the copyright law is to protect the creative process, it makes sense. I’m not sure if the first rabbit pulled out of a hat ever sued anybody!?
     

    Go comment!
  • FCC Getting Busy With The NFL

    Oct 03, 2014


    You may have seen the news that the Federal Communications Commission recently voted unanimously to eliminate the NFL’s TV blackout rule. The rule had been around since 1975, and it prohibited retransmission of a signal carrying an NFL game that was blacked out in a local market. The blackout took effect if the home team failed to sell out at 72 hours before the game. We’ll see what impact this has, given that the league can work out private arrangements with broadcast partners. 

    But that was not the only FCC/NFL huddle this week. Maybe you also saw this piece.  According to the Associated Press, a petition was filed recently with the FCC asking it to ban the use of the “Washington Redskins” from the public airwaves. The petition, filed by John Banzhaf, a law professor at George Washington University. He claims the term violates the FCC ban on indecent content.  According to FCC Chair Tom Wheeler, the commission “will be dealing with that issue on the merits, and we’ll be responding accordingly.” 

    And if you listen to Professor Eugene Volokh, the FCC is likely to turn down the request. Professor Volokh believes the ban would violate the First Amendment, because the offensive term would be banned because of its racist ideology. That makes it a content based regulation, which the First Amendment prohibits.

    The only case to deal with this type of question is the FCC v. Pacifica Foundation,  where the Supreme Court upheld the FCC’s discipline of a radio station that played George Carlin’s 7 Dirty Words routine. So, if the FCC can punish a radio station for broadcasting dirty words, why can’t it ban clearly offensive racial slurs?  

    According to  Professor V., the Supreme Court took pains to limit its holding to a small set of words that are “patently offensive” – not for any idea they convey, but simply because as a society we’ve deemed them naughty. It may be splitting hairs, here, but it’s a critical distinction. So who would have thought that the inability to ban an offensive term could be traced back to this guy:

    Go comment!
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