Internet Lawyer Blog

In California, a new Facebook feature which permits an advertiser to publish or broadcast a user's "like" of its product to others in that individual's circle is under scrutiny.

The United States District Court in San Jose, California refused to grant a motion to dismiss which states that Facebook ads violate its user's right of publicity by utilizing their names and photographs without authorization. However, the court dismissed an unjust enrichment claim. In the lawsuit, Facebook's position is that user permission is not required to promote its user's likes to those in that user's circle, in a category it terms "sponsored stories." Facebook contends that such information is newsworthy and exempted under California's right-of-publicity statute. The company's position is that its users constitute public figures.

California's right-of-publicity statute is codified under Civil Code section 3344 which states as follows:

"Any person who knowingly uses another's name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods or services, without such person's prior consent, or, in the case of a minor, the prior consent of his parent or legal guardian, shall be liable for any damages sustained by the person or persons injured as a result thereof. In addition, in any action brought under this section, the person who violated the section shall be liable to the injured party or parties in an amount equal to the greater of seven hundred fifty dollars ($750) or the actual damages suffered by him or her as a result of the unauthorized use, and any profits from the unauthorized use that are attributable to the use and are not taken into account in computing the actual damages. In establishing such profits, the injured party or parties are required to present proof only of the gross revenue attributable to such use, and the person who violated this section is required to prove his or her deductible expenses. Punitive damages may also be awarded to the injured party or parties. The prevailing party in any action under this section shall also be entitled to attorney's fees and costs."

Generally, punitive damages are awarded in addition to actual damages when the defendant acted with recklessness, malice, or deceit. Punitive damages, which are intended to punish and thereby deter blameworthy conduct, are generally not recoverable for breach of contract. The Supreme Court has held that three guidelines help determine whether a punitive-damages award violates constitutional due process: (1) the reprehensibility of the conduct being punished; (2) the reasonableness of the relationship between the harm and the award; and (3) the difference between the award and the civil penalties authorized in comparable cases. BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589 (1996).

For more information about this topic contact Los Angeles Attorney, Salar Atrizadeh, Esq.

In the recent years, online harassment or cyberharassment has become an important issue. This is because the Internet has changed our lives on so many levels. Generally, the law prohibits harassment and our readers should consider taking certain precautions when being harassed.

Cyberharassment is different from cyberstalking because it does not involve a credible threat. Cyberharassment occurs when someone sends harassing email messages, instant messages, or posts entries simply to torment another person. Different jurisdictions have different approaches in addressing cyberharassment in codifying their laws. For example, some include language addressing electronic communications in general harassment statutes. However, some states have created stand-alone cyberharassment statutes.

California Penal Code section 653.2 subsection (a) states that, "[e]very person who, with intent to place another person in reasonable fear for his or her safety, or the safety of the other person's immediate family, by means of an electronic communication device, and without consent of the other person, and for the purpose of imminently causing that other person unwanted physical contact, injury, or harassment, by a third party, electronically distributes, publishes, e-mails, hyperlinks, or makes available for downloading, personal identifying information, including, but not limited to, a digital image of another person, or an electronic message of a harassing nature about another person, which would be likely to incite or produce that unlawful action, is guilty of a misdemeanor punishable by up to one year in a county jail, by a fine of not more than one thousand dollars ($1,000), or by both that fine and imprisonment.

See California Penal Code section 422 related to hate crimes. See also California Penal Code section 653m for more information.

In California, the stalking laws are included under Section 646.9 of the Penal Code, which states that any person who willfully and maliciously, and repeatedly follows or harasses another person and who makes a credible threat with the intent to place that person in reasonable fear for his or her safety or that of an immediate family member is guilty of stalking. Stalking cases may include additional related charges such as: (1) Trespassing; (2) Vandalism; (3) Burglary; (4) Criminal Threats; and (5) Obscene, Threatening, or Annoying Phone Calls.

Please keep in mind that willfulness is a standard related to the culprit's state of mind. For example, when the person is acting purposefully, then he/she has the "conscious object" of engaging in conduct and believes or hopes that the attendant circumstances exist. If the person is acting knowingly, then he/she is practically certain that his conduct will lead to the result. If the person is acting recklessly, then he/she is aware that the attendant circumstances exist, but nevertheless engages in the conduct that a "law-abiding person" would have refrained from. If the person acts negligently, then he/she is unaware of the attendant circumstances and the consequences of his conduct, but a "reasonable person" would have been aware. Finally, if the person acts with strict liability, then mental state is irrelevant and he/she is strictly liable.

In the last few years and with the emerging of the world wide web, a new kind of stalking has developed which is also called "cyber stalking." This type of misconduct occurs when the violator utilizes the Internet, electronic mail (e-mail) or other communication devices to harass and stalk others. For example, it can occur by sending e-mails to the victim, impersonating another person in online chat rooms and e-mail messages, and disseminating lies in cyberspace. It is also important to note that the Internet is a cheap and efficient method for "cyber stalkers" to anonymously cause harm to their victims.

If you have any questions, contact me, Salar Atrizadeh, Esq. to discuss your options.

The National Association of Consumer Bankruptcy Attorneys ("NACBA") filed an amicus brief addressing the constitutionality of Michigan's bankruptcy specific exemption scheme in In re Schafer, No. 11-1340 (6th Cir.) NACBA's brief argues that section 522(b)(3)(A) of the Bankruptcy Code permits the states to enact whatever exemption laws deemed appropriate without regard to whether those laws are limited to bankruptcy debtors or applicable to all debtors in the state. Joining in the amicus brief were the National Consumer Law Center, Legal Services Association of Michigan, The Michigan Poverty Law Program and the Council of the Consumer Law Section of the State Bar of Michigan.

The State of California does not allow a debtor to use Federal bankruptcy exemptions under Title 11 of the United States Code ("Title 11 U.S.C.). For example, California has two sets of exemptions which can be used in a bankruptcy case. The exemptions are codified in California Code of Civil Procedure sections 703 and 704. A bankruptcy debtor is required to select only one set of exemptions. Click here to read the California exemptions under section 703. You may also click here to review the California exemptions under section 704. If you have any questions, contact me to discuss your options and avenues.

For example, in discussing C.C.P. § 704.730(a)(3), the United States Bankruptcy Court for the Southern District of California held that, to determine Chapter 7 debtor's "gross annual income," for purpose of deciding whether debtor was entitled to enhanced $150,000 homestead exemption accorded by the California legislature to debtors who are at least 55 years old and who have annual gross incomes of no more than $15,000, bankruptcy court had to deduct from gross receipts of business that debtor operated as sole proprietorship any legitimate business expenses, without regard to whether debtor's business was service oriented or was a more capital intensive enterprise, such as retail sales. See In re Bush, 346 B.R. 207. Generally, gross annual income has been interpreted as income from debtors gross receipts if he/she owns a business reduced by the expenses of that company. Gross annual income is the functional equivalent of "adjusted gross income" as used for computing taxes, i.e., wages, salaries, etc. or other income less the variety of possible deductions. See Shelly v. Kendall (In re Shelly), 184 B.R. 356, 358 (9th Cir. BAP 1995) affd. 109 F.3d 639 (9th Cir. 1997).

On November 28, 2011 American Airlines filed for bankruptcy protection under chapter 11. The filing by the AMR Corp. and its subsidiaries, including, but not limited to, American Airlines and American Eagle, resulted from unsuccessful attempts to win labor concessions. The bankruptcy filing listed $24.7 billion in assets and $29.6 billion in liabilities or debts.

The filing allows American to continue normal business operations during the restructuring. At the hearing, the bankruptcy court approved the debtor's requests to pay its employees, resume with its customer programs, and pay vendors critical to maintaining its daily business operations.

It seems clear that the cost gap between the airline and its competitors was indefensible. It is also clear that since 9/11, the economic climate has been most uncertain, oil prices remain high and volatile, which may have ultimately caused American Airlines to file for bankruptcy protection.

In the court papers, the company listed as its unsecured creditor Wilmington Trust Corp., which is the trustee for holders of $460 million in 6.25 percent convertible senior notes due in 2014. On September 27, 2011, the company sold $725.7 million of 10-year bonds backed by aircraft to refinance maturing debt. Also, this debtor paid the highest interest rates since 2009 to raise the cash.

Hopefully, with the economic recession coming to an end, the airlines can recover from the bear market that we are facing at this time.

The United States Bankruptcy Court required additional information from the trustee in the winding down of MF Global, to determine whether the trustee has a conflict of interest. In the case, the bankruptcy trustee has been accused of having a conflict because of prior work done for JPMorgan Chase & Co, which was one of the key lenders to MF Global. However, the trustee's law firm disclosed that it was hired by JPMorgan sometime between 2009 and 2010, and that the related income was less than 1/10 of 1% of the law firm's annual revenue.

In the legal profession, conflicts of interest are not uncommon. However, a bankruptcy trustee should be careful not to engage in conduct constituting conflict of interest with any of the bankruptcy debtors or businesses that file for bankruptcy. A conflict of interest can be a financial interest in any creditor or business of a bankruptcy or even knowing a bankruptcy debtor filing for bankruptcy. It is unethical for a bankruptcy trustee to administer a bankruptcy estate if he has a personal interest in the outcome of the bankruptcy case.

A trustee must be knowledgeable of all applicable laws, including, but not limited to, 11 USC § 701(a)(1), § 101(14), and § 101(31), and must decline any appointment in which the trustee has a conflict of interest or lacks disinterestedness. A trustee should a procedure to screen new cases for possible conflicts of interest or lack of disinterestedness when he or she is appointment.

If a trustee discovers a conflict of interest or a lack of disinterestedness after accepting the appointment, the trustee should immediately file a notice of resignation in the case. Generally, conflict waivers by either the debtor or creditor are not effective to prevent the trustee's duty to resign.