New York tax ruling could discourage telecommuting

The Court of Appeals of New York has held that a computer programmer who was an employee of a New York company and worked from his home in Tennessee 75% of the time was delinquent in paying his New York state income tax by allocating only 25% of his income in calculating the amounts due. The court upheld the constitutionality of the “convenience of the employer” test, which provides that when a nonresident is employed by a New York employer, income derived from work in another state is taxable by New York unless performed out of state for the necessity of the employer.

Huckaby v. New York State Div. of Tax Appeals, 2005 WL 705977 (Ct.App. N.Y. March 29, 2005).

Change in mail delivery policy moots prisoner’s First Amendment complaint

In the case of West v. Frank, decided on March 25, 2005 by the U.S. District Court for the Western District of Wisconsin, the court dismissed a prisoner’s complaint that a prison policy prohibiting mail delivery of information printed from the Internet was unconstitutional. The court held that the issue became moot after the policy was amended to allow delivery of such materials.

Plaintiff, an inmate in a Wisconsin prison, suffered from liver disease and desired information about the liver transplant process. After he was unable to acquire such information from the prison’s medical staff, plaintiff asked family members to send him information through the mail. On three occasions, family members printed out information from medical websites and sent them through the mail to the plaintiff. Prison officials did not deliver the materials to the plaintiff, however, citing the prison’s policy which prohibited inmates from receiving printed Internet materials.

Plaintiff brought a civil rights action against various prison officials alleging that the policy violated his First Amendment rights. At the summary judgment stage, the matter was dismissed. The court found that the prison’s change in policy to allow inmates to receive printed materials on the Internet made the First Amendment question moot. The parties to the action no longer had “an interest in the outcome that the law recognize[d] as actionable.” Further, it was “absolutely clear that the allegedly wrongful behavior [of the prison] could not reasonably be expected to recur.”

West v. Frank, 2005 WL 701703 (W.D. Wis., March 25, 2005).

California Court of Appeal: “Dumb Ass” is not a defamatory term

[Thanks to Denise at Bag and Baggage for alerting me to this entertaining and humorous case.]

It’s not too often that the courts get to pass judgment on the really important issues of our time. But in its March 24 decision in the case of Vogel v. Felice, the California Court of Appeal has determined that calling someone a “dumb ass” does not give rise to liability for defamation. “A statement that [a person] is a ‘Dumb Ass,’ even first among ‘Dumb Asses,’ communicates no factual proposition susceptible of proof or refutation.”

Of course there was a bit more at issue in this case. The plaintiffs were two candidates for public office who filed a libel suit against the defendant website operator. On his site, the defendant had listed the “Top Ten Dumb Asses,” and the plaintiffs occupied the top two slots on this list. The defendant accused one of the plaintiffs of being a “dead beat dad,” while accusing the other plaintiff of being “Bankrupt, Drunk & Chewin’ tobaccy.” Various links associated with plaintiffs led to certain unsavory websites.

The defendant filed a special motion to strike the complaint under California’s anti-SLAPP (Strategic Lawsuit Against Public Participation) statute (Cal. Civ. Proc. Sec. 425.16) which entitles such motion in any cause of action “arising from any act of [the defendant] in furtherance of [his or her] right of petition or free speech under the United States or California Constitution in connection with a public issue … unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.” The trial court denied the motion to strike, but the Court of Appeal reversed.

The court broke the analysis down to three questions: (1) Did plaintiffs’ cause of action arise from conduct in furtherance of the defendant’s petition or speech rights? (2) Was defendant’s conduct connected with a public issue? and (3) Had the plaintiffs established a probability of success on their claims? The court easily determined that the first two questions were to be answered in the affirmative. Most of the analysis focused on the third question. The court determined that the plaintiffs had not established a probability of success on their claims.

In finding that plaintiffs had not established a probability of success, the court noted that the complaint was legally insufficient on its face, because plaintiffs had failed to plead that defendant acted with “actual malice.” Furthermore, the complaint and the record was factually insufficient to support a probability of success for various reasons.

First, as discussed above, the claim that being called a “dumb ass” was defamatory failed as a matter of law for the inability of such a statement to be proved or disproved. Secondly, because the plaintiffs were public figures, they had the burden of proving the challenged statements were false. The court found that plaintiffs had not provided enough detail to show the “substantial falsity” of the claims. Finally, the court held that linking to various sites in connection with the plaintiffs’ names was not defamatory in that the association created thereby did not convey a substantially false meaning.

Vogel v. Felice, 2005 WL 675837 (Cal. Ct. App., March 24, 2005).

Internet research by juror no basis for mistrial in Kentucky court

Juror’s research into definitions of culpable mental states did not affect criminal defendant’s substantial rights.

Appellant Ross-Carter was convicted of child abuse and sentenced to six years in prison. She appealed her conviction on several grounds, one of them being that the trial court should have granted her a mistrial after one of the jurors conducted independent legal research on the Internet.

One evening while the trial was in recess, the juror looked up the definitions of culpable mental states on the Internet on her home computer and printed them. Upon learning of this, the judge interviewed the juror and determined that the juror had not shared this information with any of the other jurors. Furthermore, the definitions she had printed out were “precisely” the same as those in the jury instructions. Ross-Carter’s counsel moved for a mistrial, but the motion was denied.

On appeal, the court affirmed the denial of the motion for mistrial. The appellate court held that the trial court did not abuse its discretion in denying a mistrial, which is an “extreme remedy” and that there was no manifest necessity requiring it in this situation. Considering the record as a whole it did not appear that either the outcome of the trial or the defendant’s substantial rights were affected, and therefore the motion was properly denied.

Ross-Carter v. Commonwealth, (Not Reported in S.W.3d), 2005 WL 678539 (Ky.App., March 25, 2005.

Court declines expanding reach of antitrust laws to cover DSL and telephone services

The U.S. District Court for the Southern District of New York has granted defendant Verizon’s motion to dismiss in the case of Greco v. Verizon Commumications, Inc., holding that the effect of the antitrust laws should not be expanded to prohibit Verizon from refusing to provide DSL service to customers of competing local telephone providers.

Upset that Verizon offered its DSL service only to customers who also purchased its local phone service, Plaintiff Greco filed a class action antitrust lawsuit. Greco claimed, among other things, that this conduct of Verizon violated §2 of the Sherman Act by monopolizing local phone service. Verizon moved to dismiss, and the court granted the motion.

At issue was whether the court should extend the reach of the antitrust laws to force a “telecommunications monopolist” such as Verizon to deal with certain customers. The analysis relied heavily on a previous case involving Verizon, the 2004 Supreme Court decision of Verizon Communications, Inc. v. Law Offices of Curtis V. Trinko, LLP, (540 U.S. 398, 406 (2004) (“Trinko” ).

The Trinko case had dealt with the question of whether Verizon had violated §2 of the Sherman Act where it had allegedly discouraged customers from dealing with its rivals through various means. In that case, the court declined to apply §2, “because of the uncertain virtue of forced sharing and the difficulty of identifying and remedying anticompetitive conduct by a single firm.” The Trinko court considered four factors, which the court also considered in the present case: (1) the costs versus benefits of antitrust intervention; for example, whether judicial intervention would risk distorting investment, (2) whether the requested relief would require a court to assume a role for which it is “ill-suited,” i.e., to thrust it into the role of a “central planner,” (3) whether remediation would require “continuing supervision of a highly detailed decree,” and (4) whether there exists a “regulatory structure designed to deter and remedy anticompetitive harm.”

In declining to expand the reach of the antitrust laws in the present case, the court focused on how daunting it would be to figure the amount of damages to which the plaintiff would be entitled. For example, the court would have to consider such details as what amounts had been spent on running wires to a customer’s home (including securing rights of way, digging trenches or placing poles, and running wire underground or along poles), and how such costs should bee allocated among unbundled services. The court noted that such allocation of costs is a highly complex and hotly contested issue, and that it was thus ill-suited to redress the alleged injuries.

Greco v. Verizon Comm., Inc. (2005 WL 659200 (S.D.N.Y., March 22, 2005)

Willful copyright infringement constitutes “purposeful direction” in personal jurisdiction analysis

The U.S. District Court for the Northern District of California has confirmed that a defendant subjects itself to specific personal jurisdiction in a forum when it (1) willfully infringes the copyright of a resident of that forum, and (2) knows the plaintiff’s principal place of business is in that forum.

Brayton Purcell LLP, a California law firm, sued Recordon & Recordon, another California law firm, for copyright infringement in the Northern District of California after discovering that Recordon & Recordon had allegedly copied several pages of Brayton Purcell’s website and posted them on its own site. Brayton Purcell is located in the Northern District of California, while Recordon & Recordon is located in the Southern District.

Recordon & Recordon moved to dismiss for lack of personal jurisdiction. Because defendant is a resident of the forum state, the court noted that (a la Pennoyer v. Neff) personal jurisdiction was not at issue, but construed defendant’s motion as one challenging venue. Acting under Ninth Circuit authority interpreting the venue provision for copyright matters (28 U.S.C. §1400(a)), the court applied a personal jurisdiction analysis to answer the question of whether venue was proper in the Northern District.

The analysis eventually became one of whether the court could exercise specific personal jurisdiction over the defendant. One of the elements that must be proven to substantiate specific personal jurisdiction in a copyright infringement action is that the defendant purposefully directed activities to the forum. Proof of such “purposeful direction” satisfies the “effects test” set forth in Calder v. Jones, 465 U.S. 783 (1983). In this case, the court applied the powerful jurisdictional holding of Columbia Pictures Television v. Krypton Broadcasting of Birmingham, Inc., 106 F.3d 284 (9th Cir. 1997) to conclude that defendant had made such a purposeful direction of activity.

In the Columbia Pictures case, the Ninth Circuit held that the defendant subjected itself to personal jurisdiction in another state where it had “willfully infringed copyrights owned by Columbia, which as [the defendant] knew, had is principal place of business in [the forum district].” The court in this case concluded that Columbia Pictures was directly on point, and that Brayton Purcell had satisfied the effects/purposeful direction test by making a prima facie showing that Recordon & Recordon willfully infringed Brayton Purcell’s copyrights and by alleging without dispute that Recordon & Recordon knew Brayton Purcell’s principal place of business was in the Northern District of California.

Brayton Purcell LLP v. Recordon & Recordon, — F.Supp.2d —, 2005 WL 639706 (March 18, 2005).

Internet access during trial provides unfair advantage

The New York Workers’ Compensation Board allowed the State Insurance Fund to install a wireless network in the Syracuse office of the Board, enabling the Fund’s attorneys to access their files during proceedings before the Board. Other attorneys appearing before the Board were denied wireless Internet access. The Central New York Workers’ Compensation Bar Association, as well as a couple individual plaintiffs, filed suit against the Board, alleging that its policy to allow the Fund but not other attorneys access to a wireless network was arbitrary and capricious. The trial court agreed, and the decision was affirmed on appeal.

The court held that although the fund is an agency of the State, in litigation it is considered to be a separate entity. Thus, it is of the same status as any other litigant appearing in proceedings before the Board, and not entitled to special treatment.

In affirming that the Board had acted arbitrarily and capriciously by allowing Internet access to the Fund’s attorneys, the court found that:

“The wireless access sought by the Fund provides the Fund an unfair competitive advantage in litigated matters as the installed hardware permits only the Fund’s attorneys access to their case files in the heat of litigation, putting at their fingertips volumes of meaningful exhibits, legal research and other information, with no similar provision for claimants and the myriad of other insurance carriers whose representatives appear before the Board.”

Matter of Central New York Workers’ Comp. Bar Assn. v. State of New York Workers’ Compensation Bd., 2005 N.Y. App. Div. LEXIS 2877 (March 18, 2005).

Time Warner ordered to identify sender of offensive e-mail

In the case of Fitch v. Doe, the Supreme Court of Maine has held that while the Cable Communications Policy Act of 1984 generally prohibits a cable operator’s disclosure of subscriber information, an exception provided in the Act allows disclosure to nongovernmental entities pursuant to court order, so long as the subscriber has received notification thereof.

On Christmas Eve 2003, an anonymous person sent an email under Plaintiff Fitch’s name with a derogatory cartoon attached. Fitch filed suit in Maine state court against the unknown sender of the email (John or Jane Doe). Fitch then sought an order directing Time Warner (the ISP of the account from which the message was sent) to disclose Doe’s identity. Doe’s counsel objected to the disclosure, arguing that the disclosure was forbidden by the Cable Communications Policy Act of 1984, 47 U.S.C.A. § 551 (the “Act”), and that Doe did not consent to allow Time Warner to disclose his identity. The trial court ordered disclosure, finding that Doe’s agreement with Time Warner provided such consent.

Doe appealed to the Maine Supreme Court, but the lower court’s decision to order disclosure was affirmed. Although the court concluded that the lower court erred in determining Doe had consented to disclosure, such disclosure was authorized under an exception found in the Act.

The Act restricts cable providers from releasing information about their subscribers without the consent of the subscriber concerned. Section 551(c)(2)(B) of the Act authorizes disclosure of personally identifiable information if the disclosure is, “subject to subsection (h) of [Section 551], made pursuant to a court order authorizing such disclosure, if the subscriber is notified of such order by the person to whom the order is directed.”

Section 551(h) provides that when a governmental entity is seeking disclosure, it must show by clear and convincing evidence that criminal activity is reasonably suspected. Doe had argued that the reference to Section 551(h) served to “meld” the entire exception into one applicable only when the government seeks information about a subscriber. Because Fitch was not a governmental entity, Doe argued that the exception to the restriction of disclosure should not apply.

The court disagreed, and held that 511(h) served merely to impose a higher standard when the government seeks disclosure of information about a cable subscriber. Because Fitch was not a governmental entity, Time Warner was permitted to release the information in response to a valid court order, so long as it had given notice to Doe. The record established that Doe had received such notice, thus the Act did not bar Fitch’s access to the requested information.

Fitch v. Doe, — A.2d —-, 2005 WL 627569 (S.Ct. Me., March 18, 2005).