In The Courts: Domain Seizures Under Fire, CFAA Ruling, Adscend Consent Decree, Online Defamation Verdict and More

Growing Criticism of Feds’ Domain Seizures

Two high profile domain seizure cases have led to some strong criticism of federal law enforcment’s seizure of domains for copyright infringement. When the Justice Department seized and shutdown Dajaz1.com on November 24, 2010 for allegedly linking to four songs , it had a deadline of 90-days in which to file a complaint. Remarkably, recently unsealed court documents reveal that the Justice Department was able to repeatedly get secret extensions of this deadline without notice or input from the site owner before returning the site in December 2011 without filing a complaint. Dajaz1.com’s lawyer stressed that this exoneration

did not remedy the harms caused by a full year of censorship and secret proceedings — a form of “digital Guantanamo” — that knocked out an important and popular blog devoted to hip hop music and has nearly killed it.

This seizure is one of 758 domains seized since June 2010 with the most notable of these sites being Megaupload, which influential legal scholar Eric Goldman of Santa Clara University Law School has denounced as a “depressing display of abuse of government authority.” Goldman claims the government is improperly

acting as a proxy for private commercial interests [and] .using its enforcement powers to accomplish what most copyright owners haven’t been willing to do in civil court (i.e., sue Megaupload for infringement) . . .

Goldman strongly criticizes shutting down the site and its”shocking” disregard for legal content stored on the site that has become the collateral damage of the shutdown.

Not surprisingly, shutting down [Megaupload] suppresses countless legitimate content publications by legitimate users of Megaupload. Surprisingly (shockingly, even), the government apparently doesn’t care about this “collateral,” entirely foreseeable and deeply unconstitutional effect.

The revelations are reverberating on Capitol Hill where several members have weighed in, including Rep. Zoe Lofgren (D-CA):

A blog has the same protections as a newspaper or magazine, and yet ICE saw fit to seize this site for over a year for dubious reasons. It’s an outrageous abuse of First Amendment and due process rights, raising serious questions about why the Department of Justice allowed this seizure to continue when the government clearly did not have probable cause.

More Info: Seized site’s lawyer: US breaking the law by taking domain names, Ars Technica; Comments on the Megaupload Prosecution (a Long-Delayed Linkwrap), Technology & Marketing Law Blog; Congress Begins To Wonder Why ICE & DOJ Censored A Popular Hip Hop Blog For A Year; TechDirt.

Ninth Circuit: Exceeding Otherwise Authorized Access Not a Claim Under Computer Fraud and Abuse Act

An en banc panel of the Ninth Circuit affirmed its prior ruling in United States v. Nosal to find that the phrase
exceeds authorized access” in the Computer Fraud and Abuse Act “does not extend to violations of use restrictions.” The court explained that to hold otherwise would turn often “innocuous behavior into federal crimes simply because a computer is involved.”

Adscend Media Enters Consent Decree Over Like-jacking

A week after entering a settlement with Facebook for like-jacking, Ascend Media entered into a consent decree with the State of Washington agreeing to cease such practices and pay $100,000 in attorneys fees to the state. Adscend reportedly made over $20 million from the practice.

More Info: Washington AG Press Release; Facebook Spammers Make $20M, Get $100K Fine, Slashdot.

Texas Couple Win $13.8 Online Defamation Verdict

A Texas couple who were the targets of more than 25,000 defamatory posts accusing the couple of molestation, drug dealing, and perverted sexual behaviothat force the husband to shut down his legal practice and his wife to shut down her beauty salon won a $13.8 million jury verdict. The defendants a husband and wife team and two employees apparently were engaged in a vendetta against the plaintiffs after their acquittal of charges of sexual assault made by the wife. Texas Wesleyan law professor Brian Holland noted that cyber harassers have an illusion of anonymity and cannot rely on ISPs or hosting companies to protect their identities.

More Info: Couple smeared online win lawsuit, Ft. Worth Star Telegram.

Huffington Post Lawsuit Dismissed

A New York federal court dismissed former HuffPost bloggers’ amended complaint seeking a portion of the proceeds of the sale of Huffington Post to AOL The court explained:

Quite simply, the plaintiffs offered a service and the defendants offered exposure in return, and the transaction occurred exactly as advertised. The defendants followed through on their end of the agreed-upon bargain. That the defendants ultimately profited more than the plaintiffs might have expected does not give the plaintiffs a right to change retroactively their clear, up-front agreement. That is an effort to change the rules of the game after the game has been played, and equity and good conscience require no such result.