In late August 2016, a Ninth Circuit panel unanimously held that the FTC has no power to challenge “throttling” of unlimited data plan customers by mobile broadband providers as an “unfair or deceptive act.” The panel found that a core source of FTC authority (Section 5 of the FTC
Right to Veto Clause Prevents Partnership’s Virtual Reality Lawsuit
A judge in the Northern District Court of California ruled that a virtual reality firm’s “right to veto” provision in its partnership agreement prevented the company from bringing suit against Oculus VR, LLC (“Oculus”), a company that created a popular line of 3-D virtual reality headsets. Total Recall Technologies (“TRT”), a general partnership also in the business of virtual reality headsets, sued Oculus and its founder, Palmer Luckey, claiming that Luckey and Oculus breached a contract to develop headsets for TRT. In his Order, Judge Alsup examined how a general partnership gets authority to bring suit and the subsequent result if that suit was brought without the requisite authority. Judge Alsup granted summary judgment subject to certain conditions in favor of Oculus, finding that TRT lacked the authority to bring suit due to the partnership agreement’s “right to veto” clause. This ruling highlights the critical nature of partnership agreements for technology-based startup companies (and, indeed, all partnerships), particularly in regard to “right to veto” clauses. While veto rights can enforce compromise and cooperation between partners, such a right may prove frustrating if the relationship between partners grows irreconcilably sour.
Where’s the Octopus? New False Advertising Class Action against Goya Foods, Inc. Claims Octopus is Missing from Products
A new putative consumer class action claiming damages in excess of $5,000,000 was filed earlier this month in the Northern District of California against Goya Foods, Inc. (“Goya”). The plaintiff, a purchaser of Goya octopus products from the website Amazon.com, alleges that Goya tricked consumers into purchasing its products by labeling them as octopus when in reality, the products contained jumbo squid. The plaintiff alleges that independent DNA testing showed that Goya’s products were in fact jumbo squid, which is significantly cheaper and of lower quality than octopus.
To Save Secrecy Lawsuit, Twitter Must Challenge DOJ’s Decision to Classify Surveillance Requests
This month, a federal judge dismissed Twitter’s lawsuit challenging limits on the disclosure of government requests for information on Twitter users, pressing the company to file an amended complaint contesting the government’s decision to classify such requests.
The case, Twitter, Inc. v. Lynch, began in 2014 after the U.S. Department of Justice (DOJ) prohibited Twitter from releasing a report that listed the aggregate number of surveillance requests the company had received pursuant to the Foreign Intelligence Surveillance Act (FISA). The surveillance requests sought information about Twitter users in connection with national security investigations. The FISA restricts public disclosure of certain details about surveillance requests. Interpreting these non-disclosure provisions, the DOJ determined that the aggregate number of surveillance requests received by Twitter constitutes classified information that may not be released publicly.
CA Court Plays “Tag” – Judge Refuses to Drop Facebook Photo-Tagging Privacy Case
Earlier this month, a judge from the Northern District of California allowed a putative class action suit to proceed against Facebook. In this case, the plaintiffs alleged Facebook collected and stored biometric data of individuals’ facial features for use in “tagging” friends in digital photographs. In rejecting Facebook’s attempt to dismiss the suit, the court found that Illinois’ Biometric Information Privacy Act (“BIPA”) applied in place of California law, and that BIPA does not categorically exclude from its scope all biometric information taken from digital photographs.
Friend Request Denied: Judge Asks Attorneys to Refrain from Social Media Searches of Jurors
In late March 2016, a California federal judge asked both Google, Inc. and Oracle America, Inc. to voluntarily consent to a ban against Internet and social media research on empaneled or prospective jurors until the conclusion of the trial.
The case at issue is Oracle America, Inc. v. Google, Inc., a long-standing copyright infringement suit in which Oracle claims Google’s Android platform infringed various Oracle copyrights. This “high-profile lawsuit” has been making its way through the courts since 2010. Before the voir dire commenced in the current proceedings before the Northern District of California, Judge William Alsup realized that the parties intended to “scrub” Facebook, Twitter, LinkedIn, and other social media sites to gain personal information about the potential jurors.
Market Definition Failure Dooms Golf Caddies’ Antitrust Class Action Against PGA Tour
An antitrust class action lawsuit brought by golf caddies against the Professional Golf Association will not be afforded a mulligan after a federal district court dismissed their complaint with prejudice. A putative class of similarly-situated golf caddies sued PGA Tour, Inc. over the “bibs” that caddies wear during Tour-sponsored golf tournaments. Plaintiffs alleged that, by adopting and implementing a uniform policy that required caddies to wear a bib as a condition of their participation in a Tour event, the Tour violated the Sherman Act and the Lanham Act, misappropriated the caddies’ images and likenesses, breached its contracts with the caddies, was unjustly enriched, engaged in acts of duress and business compulsion, and violated California’s unfair competition law.