TechLaw

Seventh Circuit Affirms Dismissal as Sanction for Wikileaked Leak

Like civil disobedience, leaking information to the news media can carry a high price. So can leaking to the new media. Witness Jorge Sanchez, an attorney who succeeded in getting his client's case tossed out of court as a sanction for -- among other things -- causing a document obtained during pretrial discovery to be leaked to the Wikileaks website. Call it Justice 1.0.

In Salmeron v. Enterprise Recovery Systems Inc., No. 08-3375 (7th Cir., Aug. 27, 2009), the Seventh Circuit affirmed the trial court's dismissal order, summarizing Sanchez's conduct like this:

On June 24, defendants USA Funds, Sallie Mae, and ERS learned that a scanned copy of the confidential document containing the Guarantee Services Agreement between Sallie Mae and USA Funds had been posted on a website known as Wikileaks.org ("Wikileaks"). Also posted was a summary of the document and 13 inflammatory questions about the possible "criminality" of the arrangement. Two days later, the Chronicle of Higher Education published an online article about the leaked document captioned "Contract Raises New Concern over Sallie Mae's Ties to Guarantor." The Chronicle claimed it had obtained the document several days before it appeared on Wikileaks and denied providing it to Wikileaks. Both the copy of the Guarantee Services Agreement leaked to Wikileaks and the copy provided to the bore Bates stamps conclusively demonstrating that they originated from USA Funds's document production during this lawsuit.

...

In his response to the motion to dismiss, Sanchez stated that the document "apparently ha[d] been leaked and published without plaintiff's counsel's knowledge or approval." At a hearing the next day, the district judge questioned Sanchez about how the document could have been leaked without his knowledge when the version of the Guarantee Services Agreement published on Wikileaks had the same Bates numbering as the version released during discovery. While denying giving the Guarantee Services Agreement to Wikileaks, Sanchez nevertheless backtracked and admitted that he had leaked the document to three different, unauthorized sources: his client, another attorney whom he was thinking about bringing on as co-counsel, and a reporter for the Chronicle.

No protective order was in place at the time of the disclosures, although Sanchez attorney had agreed, orally, that the documents were being shared with him on an "attorney's eyes only" basis. Sanchez never admitted to sharing the Guaranteed Services Agreement with Wikileaks. Nevertheless, both the trial court and the appellate court agreed that sharing the document three times in violation of the "attorney's eyes only" understanding, including once to a member of the press, was the same thing as sharing it with the world:

A reasonable person should know that giving a sensitive document to a member of the press, particularly one whose interest in the document was so keen that Sanchez repeatedly had to "put him off," almost inevitably will lead to its publication. That alone is more than sufficient to support the district court's finding of willfulness.

The leaks were not the entire source of the courts' ire, but they were definitely the last straw.

Ten Interesting Things I Read This Week

This post is a collection of links to materials I've been reading this week, really just trying to catch up on old news and re-engage myself in subjects that I spent most of my summer trying to forget while on vacation. I made supplications to the Muse all morning in the hope she would favor me with a catchy title, something that might yield one of those tragically sardonic acronyms like CAN-SPAM or SPY Act, but no, nothing, and now it's time to get back to work and all I have is Ten Interesting Things I Read This Week (TITIRTW):

1. Cleveland Plain Dealer: Idea for protecting newspapers draws national spotlight, bloggers' ire

2. Media & Communications Policy: More on Newspapers and Aggregators

At this point management at most of the leading newspapers have let go of the notion that "parasitic aggregators" are a significant source of their business problems. Yet here is a respected attorney (and counsel to the Cleveland Plain Dealer) making an argument that parasitic aggregators who are free-riding on newspaper content should be stopped. Stopped by reviving the common law doctrine of "hot news" misappropriation. He believes that the Copyright Act should be amended so that it no longer preempts state-law misappropriation claims. The attorney writes: "If the legal principles that we advocate in this analysis were the law, the newspaper publisher would have a legal right to enjoin temporarily or otherwise impede the business of an aggregator that commercially exploits the publisher's news reports in direct competition with the publisher." I don't want to "Go Pundit" here, but this is a solution to a problem that just does not exist.

3. Citizen Media Law Blog: Southeastern Conference Sacks Social Media, Then Recovers

A nice account of the Southeastern Conference's attempt to protect the interests of its television broadcast partners by prohibiting fans from blogging, twittering et cetera during football games that reminded me we are still very much at the beginning of the user-generated media era. The article summarizes the state of the law on the "hot news" doctrine, making a nice counterpoint to the "save the newspapers" discussions above. 

4. U.S. Department of Homeland Security: Secretary Napolitano Announces New Directives on Border Searches of Electronic Media

Modest privacy-enhancing protections announced here, though DHS is not giving back an ounce of their authority to search anyone, anything, any time, at the border. Which still includes laptops: "In the course of a border search, with or without individualized suspicion, an Officer may examine electronic devices and may review and analyze the information encountered at the border."

The American Civil Liberties Union filed a lawsuit this week seeking records relating to searches of electronic devices at the border.

5. The Volokh Conspiracy: How the Ninth Circuit Tried To End Plain View for Computer Searches Without Ending Plain View for Computer Searches

Prof. Orin Kerr ruefully labels the en banc Ninth Circuit's decision in United States v. Comprehensive Drug Testing Inc. as Miranda for computer searches. He writes: "I think the best way to understand today's remarkable Ninth Circuit Fourth Amendment decision in United States v. Comprehensive Drug Testing is that the Ninth Circuit did its best to end the plain view exception for computer searches without formally ending plain view for computer searches. Chief Judge Kozinski's opinion created an elaborate statute-like new regime to make sure the government acts like there is no plain view exception. The decision is a workaround that effectively ends plain view for computer searches by making sure the government will never collect electronic evidence in plain view in the first place."

Sounds a little bitter to me. Judge Kozinski's opinion is a sensational read. And if it really is like Miranda, read it, because it's going to be around for a long time.

6 & 7. Gregg Easterbrook (ESPN): Tuesday Morning Quarterback's AFC preview and TMQ travels back in time to August 2009

A personal favorite, a guilty pleasure, one of the best writers on the Web, reminds me of Tom Wolfe way back when. More than football in here too: smart ruminations on Twitter, the British Humanist Association, and deadly objects from space.

8. Consumer Law & Policy Blog: Official Word from US Courts -- Feel Free to Use RECAP With Our Blessing

The implication here is that the AO's office would naturally have disapproved of RECAP, a Firefox addon that uploads PACER documents to a free repository. But surprise surprise it appears they don't mind at all. Am I the only one who believes the judiciary is the most -- not the least -- open branch of the federal government?

9. Spam Notes: Electronic Communications, Privacy, Data Protection, and More: Gordon v. Virtumundo: 9th Cir Smacks Down Anti-Spammers in Trifecta Defense Win

Ah, August 6, 10 a.m. PST. I was fly-fishing a gentlemanly stretch of the Gallatin River in Yellowstone National Park. Wretched souls like Venkat were slogging through Gordon v. Virtumundo's discussion of CAN-SPAM preemption. He writes: "As far as opinions go, this is as good as it gets." I couldn't agree more. About the fishing, of course.

10. Techdirt: Interview With William Patry: Understanding How The Copyright Debate Got Twisted

Prof. William Patry is coming out with a new book, Moral Panics and the Copyright Wars. Here, a very interesting discussion with Techdirt's Mike Masnick draws out Patry's views on fair use, the file-sharing wars, and copyright politics.

Turning the Page on "Hyperwrap" Contracts

Hyperwrap contracts. That was a new phrase for me, until I read it this morning in PDC Laboratories Inc. v. Hach Co., No. 09-1110 (C.D. Ill., Aug. 25, 2009), a case in which the court held that a limitation of remedies clause that was available for viewing behind a hyperlink was an enforceable term in the parties' contract for the sale of goods.

The court said it was following Hubbert v. Dell Corp., 359 Ill. App.3d (Ill. Ct. App. 2005), a case in which an Illinois appellate court similarly held that contract terms available behind a blue hyperlink on a white page -- a Web browser's default color display -- were adequately brought to the purchaser's attention. Hubbert, the court said here, "is the leading authority in 'hyperwrap' cases, such as the case now before the Court."

My mind is not nimble enough to detect any difference between hyperwrap and browsewrap, at least in the rhetorical sense. Hyperwrap doesn't add anything to my understanding of what is going on from a legal perspective, and neither term feels like firm footing to me.

As far as the facts are concerned, there were some small but apparently inconsequential differences between Hubbert and PDC Laboratories. In Hubbert, the link to the additional terms was displayed five times during the contracting process, whereas in PDC Laboratories the link was visible just three times. Hubbert involved an arbitration clause; in PDC Laboratories the hyperlinked additional term was a limitation remedies clause. Cutting the other way, PDC Laboratories involved a business-to-business contract, while Hubbert dealt with a consumer transaction.

From Hubbert:

The blue hyperlinks on the defendant's Web pages, constituting the five-step process for ordering the computers, should be treated the same as a multipage written paper contract. The blue hyperlink simply takes a person to another page of the contract, similar to turning the page of a written paper contract. Although there is no conspicuousness requirement, the hyperlink's contrasting blue type makes it conspicuous.

From PDC Laboratories:

It is undisputed that the Terms were hyperlinked on three separate pages of the online Plate order process in underlined, blue, contrasting text. This contrasting text is sufficient to be considered conspicuous under Hubbert, even though the Terms are only linked three times instead of five times, because it is not the repetition of the display of a term that is determinative but the contrast of a term.

So now we have two court rulings (at least) for the proposition that hyperlinks are sufficiently conspicuous to be used to supply additional terms for an online contract.

These cases demonstrate the power of an apt metaphor when applying old law to new technology. Before encountering these decisions, I had always considered placing additional contract terms behind a hyperlink as somehow "hiding" them from the other party -- an unfair way of dealing. Behind a hyperlink. Sounds like under the rug. But if you embrace the metaphor that hyperlinks are the customary way of "turning a page" online, then it doesn't seem unfair at all to expect parties to "turn" each "page" of their online contracts. Kudos to the lawyer who came up with that metaphor.

Marketers Make Good on Threat to Challenge Maine Privacy Law

The Progress and Freedom Foundation is reporting that a group of marketers and publishers filed a lawsuit yesterday challenging the constitutionality of Maine's Act to Prevent Predatory Marketing Practices Against Minors, a law that prohibits companies from collecting "health-related information or personal information for marketing purposes from a minor without first obtaining verifiable parental consent of that minor's parent or legal guardian." That's a tall order for marketers, requiring fundamental changes in their operations.

The listed plaintiffs are the Maine Independent Colleges Association, Maine Press Association, NetChoice, and Reed Elsevier Inc.

The law becomes effective Sept. 12.

The lawsuit was reportedly filed in the U.S. District Court for the District of Maine, though it is not yet available on the court's PACER/ECF site. A copy of the plaintiffs' motion for a preliminary injunction distributed by PFF is available here.

Plaintiff's allege that the Maine law violates the First Amendment (they allege it should be tested under the rigorous standards applicable to non-commercial speech), the dormant Commerce Clause, and state preemption provisions in the Children's Online Privacy Protection Act, a federal measure applicable to children under age 13.