Archive for August, 2011

Social Media Policies are Critical for Managing Online Legal Issues

Ethan Wall | August 30, 2011 in Social Media Law & Order | Comments (0)

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Almost every major consumer product now invites customers to follow its product on Facebook or Twitter – but the explosion of social media can be a double-edged sword for businesses, warns Karen L. Stevenson of Buchalter Nemer on behalf of the ABA’s Business Law Section.

When consumer complaints go viral, companies may find it hard to regain control of the message about their products. The near-universal access to social-networking media requires that companies and their legal counsel be proactive in evaluating current policies and developing strategies that allow their company to take advantage of the benefits of social media, and effectively navigate the special challenges that come with it.

Best practices for managing legal issues and making effective use of social networking for your business include: (1) implementing a written policy on social media usage for employees and business units; (2) monitoring compliance with the policy; (3) be consistent in responding to policy violations; (4) clearly distinguishing rules for personal versus business use of social media that bears the company brand, trademarks, service marks, logos and product images; and (5) conducting periodic audits of your company’s social media postings to maintain standards and gather customer feedback.

I had the pleasure of co-authoring the Social Media Guide for Lawyers along with the 2010-11 Meritas Leadership Institute that includes two sample policies for governing social media useful for employees and firms.

Boston: Facebook was the “One that Got Away”

Ethan Wall | August 25, 2011 in Social Media Law & Order | Comments (0)

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When Mark Zuckerburg sought funding from Boston venture capitalists to expand Facebook in 2004, the New England firms declined.  According to the Daily Business Review, they’ve been regretting their decision ever since.

Following their decision to ignore Facebook’s request to provide capital for the world’s most-popular social networking service, Boston venture capitalists sat idly by while Zuckerberg’s moved Facebook from his Harvard University dorm to Palo Alto, California.  Since that time, Boston has continued to lose its market share to Silicon Valley and New York in the past seven years.

“There was a little bit of shock that we missed it, as a community,” [Michael] Greeley, a board member of the National Venture Capital Association, said in an interview. Since then, Boston “really rallied around ‘how do you let these kids know that the state is open for business and a great place to start companies?’ Sort of a post-Facebook echo boom effect. Zuckerberg should never have left.”

In the wake of LinkedIn’s successful initial public offering, and in anticipation for Facebook going public in the foreseeable future, venture capitalists should keep their eyes peeled for the next new media opportunity before it leaves for more silicon-pastures.

Judge Dismisses Class Action Against Facebook for “Friend Finder”

Ethan Wall | August 23, 2011 in Social Media Law & Order | Comments (153)

A federal judge has dismissed a class action against Facebook that claimed the site’s “Friend Finder” feature violated users’ rights to control the use of their names and likenesses, the Daily Business Review reports.

Northern District Judge Richard Seeborg granted Facebook’s motion to dismiss, with leave to amend, finding that the plaintiffs had not adequately shown they’d suffered any injury.

“Plaintiffs have not shown how the mere disclosure to their Facebook friends that they have employed the Friend Finder service (even assuming some of them did not) causes them any cognizable harm,” Seeborg wrote.

Seeborg did, however, find that Facebook had not obtained consent to use names or likenesses to promote Friend Finder and he rejected Facebook’s argument that its terms of service and privacy policy give it the right to use names or profile photos in any manner.

“Nothing in the provisions of the terms documents to which Facebook has pointed constitutes a clear consent by users to have their name or profile picture shared in a manner that discloses what services on Facebook they have utilized, or to endorse those services,” Seeborg wrote.

The plaintiffs sued Facebook last November, saying they did not consent to having their names and likenesses used to promote the Friend Finder service.

The feature prompts users to enter their e-mail account passwords, then it scans users’ e-mail contact lists for people they might want to add as friends. However, the plaintiffs allege, the feature also uploads users’ e-mail contact list to Facebook’s server. The site then repeatedly e-mails nonmembers urging them to join, the suit says.

Hat tip to Al Saikali, Esq. for a uncovering the Order.

Case Law Update for August 20, 2011 (Volume IV, Issue 34)

Manuel Farach | August 21, 2011 in Real Estate & Business Litigation Record | Comments (0)

Real Property and Business Litigation Report
Volume IV, Issue 34
August 20, 2011
Manuel Farach

St. Johns River Water Management Dist. v. Molica, — So.3d —-, 2011 WL 3627412 (Fla. 5th DCA 2011).
A water management district does not exceed either its authority nor its jurisdiction under Chapter 373 of the Florida Statutes by creating an administrative rule that requires a permit to fill a wetland.

State Road 7 Investment Corp. v. Natcar Ltd. Partnership, — So.3d —-, 2011 WL 586124 (Fla. 4th DCA 2011).
Error to grant summary judgment to mortgagee for default based on failure to pay municipal liens while the question of whether the municipal lien is valid is still being litigated on cross-claims. However, an attorneys’ fees award to the mortgagee determining its mortgage was superior to the municipal lien is proper.

U.S. Bank Nat. Ass’n v. Paiz, — So.3d —-, 2011 WL 3586132 (Fla. 3d DCA 2011).
An unsworn Rule 1.540 Motion for Relief from Judgment filed by mortgagors “nearly two years after being served with process, ten months after the final judgment of foreclosure was entered, more than five months after the property was sold and on the eve of eviction” is not legally sufficient; Rule 1.540 is not a substitute for timely appeal.

Robles-Martinez v. Diaz, Reus & Targ, LLP, — So.3d —-, 2011 WL 3586179 (Fla. 3d DCA 2011).
Returns of service can be challenged by either demonstrating the return is not “regular on its face,” i.e., does not comply with Florida Statute § 48.21 and is therefore facially invalid, or by alleging the service of process is invalid by contesting the factual allegations of the return, e.g., the party was substitute served at a location not her “usual place of abode.” A facially regular return is prima facie proper, and the party contesting service must prove the deficiency by clear and convincing evidence. The statute requires service “at the usual place of abode,” i.e., only requires the party be living at the premises at the time of service. The statute does not require service at the “residence” of the party (which may be different than “usual place of abode”).

Martinez v. Aurora Loan Services, LLC, — So.3d —-, 2011 WL 3586203 (Fla. 3d DCA 2011).
Motions for rehearing of orders deciding Rule 1.540 motions are not “authorized” for appellate purposes and do not toll the time to file an appeal.

BECC Holding II, Inc. v. Rachtanov, — So.3d —-, 2011 WL 3586212 (Fla. 3d DCA 2011).
Purchaser at tax deed sale may request reimbursement of monies used to pay tax certificates from surplus tax deed sale proceeds.

I-Net Technologies, Inc. v. Salazar, — So.3d —-, 2011 WL 3586233 (Fla. 4th DCA 2011).
A cause of action in a personal services contract dispute accrues, for venue purposes under Florida Statute §47.051, where the personal services are rendered.

City of Riviera Beach v. That Certain Unnamed Gray, Two Story Vessel Approximately Fifty-Seven Feet in Length, — F.3d —-, 2011 WL 3629483 (11th Cir. 2011).
A “vessel” under 1 U.S.C. § 3 (federal maritime law) includes “every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water,” notwithstanding the vessel is built to be and is used as a residence and is not capable of navigation.

Case Law Update for August 20, 2011 (Volume IV, Issue 33)

Manuel Farach | August 18, 2011 in Real Estate & Business Litigation Record | Comments (0)

Real Property and Business Litigation Report
Volume IV, Issue 33
August 13, 2011
Manuel Farach

Palmcrest Homes of Tampa Bay, LLC v. Bank of America, N.A., — So.3d —-, 2011 WL 3518026 (Fla. 2d DCA 2011).
Trial courts, not arbitration panels, determine the threshold issues of waiver, unconscionability of the whole contract (as opposed to unconscionability of the arbitration clause), and whether third parties are bound to arbitrate.

Parker v. LaSalle Bank Nat. Ass’n, — So.3d —-, 2011 WL 3476668 (Fla. 4th DCA 2011).
Constructive service is ineffective if the affidavit of diligent service shows a lack of diligence in attempting to locate the defendant, i.e., only one attempt at service and no attempts to inquire of neighbors or the tenant. This demonstrates lack of diligence despite searches for credit information, directory assistance, motor vehicle records, the post office, property tax records, national death records, and prison records.

Godfrey v. Reliance Wholesale, Inc., — So.3d —-, 2011 WL 3477007 (Fla. 3d DCA 2011).
Writ of prohibition may only be invoked when a trial court is without jurisdiction; the fact that the plaintiff may lack standing but the trial court is prepared to allow the plaintiff to proceed is not grounds for a writ of prohibition.

Bennett ex rel. Bennett. Tenet St. Mary’s, Inc., — So.3d —-, 2011 WL 3477015 (Fla. 4th DCA 2011).
If counsel is involved in conduct which may result in the striking of pleadings, a trial court must consider and make findings on the following Kozel v. Ostendorf, 629 So.2d 817 (Fla.1993), factors:
1) whether the attorney’s disobedience was willful, deliberate, or contumacious, rather than an act of neglect or inexperience; 2) whether the attorney has been previously sanctioned; 3) whether the client was personally involved in the act of disobedience; 4) whether the delay prejudiced the opposing party through undue expense, loss of evidence, or in some other fashion; 5) whether the attorney offered reasonable justification for noncompliance; and 6) whether the delay created significant problems of judicial administration.

Fit v. Attorney’s Title Ins. Fund, Inc., — So.3d —-, 2011 WL 3477019 (Fla. 3d DCA 2011).
Title insurance company that pays claims to lenders that were issued Closing Protection Letters for closings where the title agent fraudulently inflated values at closing and pocketed the difference is not entitled to an award of unjust enrichment unless it can show it, as opposed to the lenders, conferred the benefit that unjustly enriched the title agent.

Florida Gamco, Inc. v. Fontaine, — So.3d —-, 2011 WL 3477081 (Fla. 4th DCA 2011).
Fla. Stat. § 47.051 provides that venue for a domestic Florida corporation is where the corporation has its home office, while venue is proper for a foreign corporation wherever it has an agent or other representative.

Katzman v. Rediron Fabrication, Inc., — So.3d —-, 2011 WL 3477093 (Fla. 4th DCA 2011).
Discovery upon a hybrid fact/expert witness is not necessarily restricted to the factors set forth in Elkins v. Syken, 672 So.2d 517 (Fla. 1996).

B&C Investors, Inc. v. Vojak, — So.3d —-, 2011 WL 3477163 (Fla. 2d DCA 2011).
A constructive trust is a remedy and not a cause of action.

CBT Flint Partners, LLC v. Return Path, Inc., — F.3d —-, 2011 WL 3487023 (11th Circ. 2011).
Patent claim construction is a matter of law, and a reviewing court can correct an obvious mistake by inserting the word “and” in between “detect” and “analyze.”

Facebook Must Produce Electronically Stored Information (ESI) – Not Merely “Provide Access” to ESI

Ethan Wall | in Social Media Law & Order | Comments (0)

United States Magistrate Judge Howard Lloyd of the Northern District of California compelled Facebook to produce electronically stored information (“ESI”), not merely “provide access” thereto on a commercial website that allowed it to restrict class action plaintiffs from reviewing those materials properly, Forbes reports.

The court’s order granting the plaintiff’s Motion To Compel Production occurred in In re Facebook PPC Advertising Litigation (Apr. 6, 2011), where advertisers on Facebook brought a class action for breach of contract and violation of California’s Unfair Competition Law alleging that Facebook misrepresented the quality of its click filters, which are meant to screen out certain clicks that do not meet specified requirements designed so that advertisers are not billed for them.

When Facebook refused to agree to an ESI Protocol to set forth the manner and form of electronic production, and later uploaded its discovery responses in non-native format to a commercial website in a manner that seriously limited the plaintiffs’ ability to review them, plaintiffs moved to compel the production be produced directly to them in native format.

Facebook opposed an ESI Protocol arguing it would impose “rigid, up-front requirements” by “forcing the parties to anticipate and address all potential issues on the form of electronic production would likely have the result of frustrating and slowing down the discovery process.” The Court overruled Facebook’s objection as “speculative,” holding that “[t]he argument that an ESI Protocol cannot address every single issue that may arise is not an argument to have no ESI Protocol at all.”

The Court also overruled Facebook’s objection to producing documents in native format to plaintiffs – as opposed to making such documents available on an online website – citing a two-tiered stipulated protective order entered into between the parties.

The Court’s treatment of Facebook’s objections emphasizes the importance of counsel’s Federal Rule of Civil Procedure Rule 26(f)’s “meet and confer” mandate to set forth reasonable procedures to preserve and produce relevant ESI.

Hat tip to Canaan Himmelbaum, Esq. from Peak Discovery who was quoted by Forbes in the article referenced above.

“Facebook law” Prevents Student-Teacher Communication in Missouri

Ethan Wall | August 16, 2011 in Social Media Law & Order | Comments (3)

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Should teachers be communicating with students through social media sites? The State of Missouri says “no,” and a newly enacted law is stirring a debate between the benefits and pitfalls of social media on the ability of teachers to effectively communicate with their students.

Missouri recently enacted the Amy Hestir Student Protection Act, a 35 page act that includes two sentences that are causing quite a stir and earning it the nickname the “Facebook Law.”

No teacher shall establish, maintain, or use a work-related internet site unless such site is available to school administrators and the child’s legal custodian, physical custodian, or legal guardian.

No teacher shall establish, maintain, or use a nonwork-related internet site which allows exclusive access with a current or former student.

The politician supporting the act explained that the “primary aim is to prevent teachers who have sexually assaulted a student,” and the “idea is to discourage teachers and students from communicating exclusively, without a parent, guardian or school administrator being able to access the message.”

Others are concerned with the potential chilling effect on student/teacher communication, and “will lead to teachers erring on the side of caution and communicating less with students, resulting in weaker relationships.”   And a representative of the ACLU believes the bill “silences a lot more speech than would be necessary to attack the problem.”

Have an opinion on whether Missouri’s’ “Facebook law” does more harm than good? Than raise your hand and tell us what you think.

Case Law Update for August 6, 2011 (Volume IV, Issue 32)

Manuel Farach | August 7, 2011 in Real Estate & Business Litigation Record | Comments (0)

Real Property and Business Litigation Report
Volume IV, Issue 32
August 6, 2011
Manuel Farach

FL-Carrollwood Care, LLC v. Gordon, — So.3d —-, 2011 WL 3364349 (Fla. 2d DCA 2011).
An arbitration agreement which lacks an express grant of jurisdiction to award punitive damages is not substantively unconscionable because arbitrators inherently have such jurisdiction. Likewise, a cap on non-economic damages and limitation on discovery also do not make an mandatory arbitration unconscionable. In any event, these provisions do not prevent arbitration because a court can sever these provisions from the agreement and still compel arbitration.

Razin v. A Milestone, LLC, — So.3d —-, 2011 WL 3364362 (Fla. 2d DCA 2011).
A custodian to wind up a LLC dissolution is typically given the same powers as a receiver, and accordingly, parties may appeal appointment of a custodian under the same rule as appointment of a custodian, i.e., Florida Rule of Appellate Procedure 9.130 (a)(3)(D). Moreover, Florida Statute § 408.225 (1)(d) states that a LLC manager does not violate the duty of loyalty by actions which incidentally further his own interests (such as hiring an attorney to represent him with company funds) and the LLC Act provides that parties may waive conflicts of interest in the LLC operating agreement.

Strickland v. Jacobs, — So.3d —-, 2011 WL 3364379 (Fla. 2d DCA 2011).
An employer is liable for the intentional torts committed by her employee while the employee is acting in the course and scope of her duties when the act was meant to further the interests of the employer. Thus, an employer can be held responsible for the tort of false imprisonment under the circumstances set forth above.

Sheppard v. M & R Plumbing, Inc., — So.3d —-, 2011 WL 3331216 (Fla. 1st DCA 2011).
A construction lien can only arise from an agreement, i.e., a contract, a verbal agreement or a contract implied in fact, and cannot arise from a contract implied in law. Accordingly, a construction claimant prevailing on a contract implied in law is not entitled to a construction lien nor prevailing party attorneys’ fees under Florida Statute § 713.29.

Lepisto v. Senior Lifestyle Newport Ltd. Partnership, — So.3d —-, 2011 WL 3300199 (Fla. 4th DCA 2011).
A person who signs an addendum to a nursing home contract as the “financially responsible party” is bound by the arbitration provisions of the addendum, but the party who signed the contract without an arbitration provision is not bound to arbitrate as he did not agree to the arbitration provision.

1000 Friends of Florida, Inc. v. Palm Beach County, — So.3d —-, 2011 WL 3300204 (Fla. 4th DCA 2011).
Comprehensive land use plans are interpreted in the same manner as statutes, i.e., courts first look to the plain meaning of the plan. Accordingly, a local government may not issue a development order for rock mining if the list of reasons for rock mining are not met.

Hutson v. Plantation Open MRI, LLC, — So.3d —-, 2011 WL 3300213 (Fla. 4th DCA 2011).
A party may oppose a summary judgment by filing an affidavit in opposition and moving to amend its affirmative defenses and setting the motion to amend for hearing the same date as the summary judgment.

Coral Way Condominium Investments, Inc. v. 21/22 Condominium Association, Inc., — So.3d —-, 2011 WL 3300233 (Fla. 3d DCA 2011).
A party may not contest the payment of a condominium special assessment by the defense of breach of fiduciary duty by the board of directors of the association.

Miami-Dade County v. Torbert, — So.3d —-, 2011 WL 3300308 (Fla. 3d DCA 2011).
A plat recorded in 1926 and not referred to nor relied upon in hundreds of transactions since that date cannot be used as the basis for stating the land is currently governed by the1926 plat as opposed to current land use restrictions.

B & I Contractors, Inc. v. Mel Re Const. Management, — So.3d —-, 2011 WL 3300328 (Fla. 2d DCA 2011).
A trial court may not refuse to order proceedings supplementary.

Hotel 71 Mezz Lender, LLC v. Tutt, — So.3d —-, 2011 WL 3300384 (Fla. 3d DCA 2011).
A trial court may not sua sponte order summary judgment against a non-movant.

Claridge H, LLC v. Claridge Hotel, LC, — So.3d —-, 2011 WL 3300395 (Fla. 3d DCA 2011).
A trial court may not order a directed verdict against a defendant before the defendant has had an opportunity to present its case.

Facebook is the New Ammunition for Divorce Battles

Ethan Wall | August 2, 2011 in Social Media Law & Order | Comments (5)

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If divorce is war, Facebook is ammunition.  According to First Coast News, Facebook and other social networking wesbites are being used in approxiamtely 80% of divorce cases.

Family law attorneys are quickly understanding the benefits of social media for collecting evidence about their client’s former spouse’s activities outside the court room.  Often times, the spouse’s depiction on their Facebook profiles conflicts with their testimony in litigation.  Attorney Rebecca Zima knows the power of Facebook evidence first hand:

“The pictures people put on there are used against them,” Zima said. “I’ve used one Facebook post against someone because she claimed she had broken up with this convicted felon.”

But Facebook told a different story.

“She said she was in a relationship with him, she had pictures of him on Facebook and all of this was used against her.”

While attorneys continue to face evidentiary hurdles for admitting social media content into evidence, the content found on social media profiles is commonly used for impeachment.  When used effecitvely, impeachment evidence can have a critical impact on a witness’s credibility and the outcome of a case.  “Each time I’ve used Facebook in my cases, my client has done very well,” Zima confirms.

Hat tip to Michael Napoleone for a link to the First Coast News article.

Case Law Update for July 30, 2011 (Volume IV, Issue 31)

Manuel Farach | August 1, 2011 in Real Estate & Business Litigation Record | Comments (0)

Real Property and Business Litigation Report
Volume IV, Issue 31
July 30, 2011
Manuel Farach

Andrews v. Frey, — So.3d —-, 2011 WL 3206882 (Fla. 5th DCA 2011).
A proposal for settlement wherein the offeror seeks the release of a third party is valid. However, the question is certified to the Florida Supreme Court (which is currently considering the same question upon a certification from the Eleventh Circuit Court of Appeals).

BMR Funding, LLC v. DDR Corp., — So.3d —-, 2011 WL 3207810 (Fla. 2d DCA 2011).
Failure to plead entitlement to attorneys’ fees in an answer waives fees unless the party opposing the claim for fees acquiesces to the claim.

Nunes v. Allstate Inv. Properties, Inc., — So.3d —-, 2011 WL 3107801 (Fla. 4th DCA 2011).
An owner of property who is aware of a forged deed conveying her property, but takes no steps to stop a bona fide purchaser from buying the property is equitably estopped from claiming the forgery prevented title from transferring to the BFP.

Posner & Sons, Inc. v. Transcapital Bank, — So.3d —-, 2011 WL 3109205 (Fla. 4th DCA 2011).
The fact that information is publicly available in the recorded chain of title is not an absolute bar to an action alleging fraud which could have been discovered had the chain of title been searched.

Ball v. D’Lites Enterprises, Inc., — So.3d —-, 2011 WL 3109733 (Fla. 4th DCA 2011).
Statements made on a commercial website concerning pending litigation are not entitled to absolute judicial immunity since the statements are not made in the litigation itself, are made to the public at large, are not steps in the judicial process, and do thing to enhance the policy behind the privilege.

Legacy Place Apartment Homes, LLC v. PGA Gateway, Ltd., — So.3d —-, 2011 WL 3111641 (Fla. 4th DCA 2011).
Failure to commence construction by the date stated in a contract with a “time of the essence” clause is a material breach of the contract, and renders unavailable the defense of substantial performance. However, the protections of a time of the essence clause may be waived.

Weston TC LLLP v. CNDP Marketing Inc., — So.3d —-, 2011 WL 3111870 (Fla. 4th DCA 2011).
A “notice of unavailability” filed during the 30 day grace period of Florida Rule of Civil Procedure 1.420 (e) is sufficient to preclude involuntary dismissal for failure to prosecute.

Rudge v. City of Stuart, — So.3d —-, 2011 WL 3111926 (Fla. 4th DCA 2011).
A municipality is not barred from seeking injunctive relief to abate a nuisance by virtue of the fact that the municipality has already obtained a daily fine intended to compel compliance.

Paul Jacquin & Sons, Inc. v. City of Port St. Lucie, — So.3d —-, 2011 WL 3111937 (Fla. 4th DCA 2011).
Courts should not interfere with public entity decisions to accept or reject bids absent dishonesty, illegality, fraud, oppression or misconduct.

Laurencio v. Deutsche Bank Nat. Trust Co., — So.3d —-, 2011 WL 3111972 (Fla. 2d DCA 2011).
Parties are entitled to liberally amend pleadings, even on eve of a summary judgment hearing, and failure to allow amendment to raise a condition precedent defense requires reversal of a summary judgment for a mortgagor.

Felger v. Mock, — So.3d —-, 2011 WL 3055397 (Fla. 1st DCA 2011).
Failure to apply the correct standard of proof is not one of the statutorily enumerated bases for vacating an arbitration award, and an arbitration panel does not exceed its powers or jurisdiction by applying the wrong standard or applying the wrong law.

In re Diaz, — F.3d —-, 2011 WL 3117875 (11th Cir. 2011).
Waiver of sovereign immunity in the bankruptcy context relies on the “litigation waiver” (a state invokes aid of bankruptcy court by filing a proof of claim), “congressional abrogation” (congressional decision to waive immunity), or “consent by ratification” (states consented to the bankruptcy supremely clause by ratifying into the Union) theories. Since the debtor raised violation of the automatic stay after confirmation of his Chapter 13 plan, none of the three theories operate to waive sovereign immunity.