Justia U.S. 4th Circuit Court of Appeals Opinion Summaries

Articles Posted in Internet Law
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In a case before the United States Court of Appeals for the Fourth Circuit, six men affiliated with the transnational criminal organization MS-13 were convicted of sex trafficking a thirteen-year-old girl by force, fraud, or coercion, and conspiracy to do the same. The accused appealed the district court’s denial of their motions to suppress evidence obtained from Facebook warrants, arguing the warrants failed the probable cause and particularity requirements of the Fourth Amendment. One of the accused also appealed the district court’s denial of his motion for acquittal, contending that the evidence presented at trial was insufficient to sustain his conviction.The court held that the Facebook warrants were supported by probable cause, as they were based on substantial evidence linking the accused’s use of Facebook to their criminal activities. The court also held that the warrants were sufficiently particular as they identified the items to be seized by reference to the suspected criminal offenses and confined the officers’ discretion by restricting them from rummaging through the accused’s social media data in search of unrelated criminal activities. However, the court noted that future warrants enhance their claims to particularity by requesting data only from the period of time during which the defendant was suspected of taking part in the criminal conspiracy.The court rejected one appellant's sufficiency challenge to his conviction and affirmed his convictions, finding that substantial evidence supported the jury’s conclusion that he was guilty of conspiracy to engage in sex trafficking of a minor under fourteen or of a minor by force, fraud, or coercion, and of conspiracy to transport a minor in interstate commerce with intent for the minor to engage in prostitution or illegal sexual activity.Therefore, the court affirmed the judgment of the district court in all respects. View "United States v. Zelaya-Veliz" on Justia Law

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In this case, the United States Chamber of Commerce and three other trade associations sued to stop the enforcement of a new state tax in Maryland known as the Digital Advertising Gross Revenues Tax Act. The law requires large technology companies to pay a tax based on gross revenue they earn from digital advertising in the state. The plaintiffs alleged that the Act violates the Internet Tax Freedom Act, the Commerce Clause, the Due Process Clause, and the First Amendment. The United States District Court for the District of Maryland dismissed three of the counts as barred by the Tax Injunction Act, which prevents federal courts from stopping the collection of state taxes when state law provides an adequate remedy. The court dismissed the fourth count on mootness grounds after a state trial court declared the Act unconstitutional in a separate proceeding. On appeal, the United States Court of Appeals for the Fourth Circuit affirmed the district court's dismissal of the first three counts, but vacated the judgment to the extent it dismissed those counts with prejudice, ordering that the dismissal be entered without prejudice. The appellate court also vacated the dismissal of the fourth count and remanded for further proceedings, as the plaintiffs' First Amendment challenge to the Act's prohibition on passing the tax onto consumers was not moot. View "Chamber of Commerce of the United States v. Lierman" on Justia Law

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Appellant Shenzhen Stone Network Information Ltd. (“SSN”) appealed the district court’s order granting summary judgment on Appellee Prudential Insurance Company of America’s (“Prudential”) cybersquatting claim. Prudential owns several registered trademarks on the term PRU and other PRU-formative marks. Prudential initiated the underlying action after discovering that SSN had registered the domain name PRU.COM. Prudential alleged that SSN violated the Anti-Cybersquatting Consumer Protection Act (“ACPA”), by registering a domain name identical to Prudential’s distinctive mark with the bad faith intent to profit. The district court determined that SSN could be held liable for cybersquatting because the ACPA is not limited to the initial registration of a domain name but encompasses subsequent re-registrations as well. The district court concluded that SSN possessed the bad faith intent to profit from the disputed domain name and granted Prudential’s motion for summary judgment. On appeal, SSN contests the district court’s ruling that SSN acted in bad faith when registering the disputed domain name.   The Fourth Circuit affirmed, concluding that the totality of the circumstances supports the conclusion that SSN acted in bad faith and that SSN is not entitled to the benefit of the ACPA’s safe harbor provision. The court reasoned that SSN failed to satisfy the statute’s safe harbor provision. First, SSN’s self-serving denials of subjective belief that its use of the PRU.COM domain name was lawful are insufficient to defeat summary judgment absent objective corroboration. Further, SSN did not have reasonable grounds to believe that its registration of the PRU.COM domain name was otherwise lawful. View "The Prudential Insurance Company of America v. Shenzhen Stone Network Information Ltd." on Justia Law

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Following a data breach targeting servers owned by Defendant, Plaintiffs alleged that Defendant violated federal securities laws by omitting material information about data vulnerabilities in their public statements.The Fourth Circuit affirmed the district court’s dismissal of the complaint, finding that the investors did not adequately allege that any of Defendant’s statements were false or misleading when made.The court explained that to state a claim under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, a plaintiff must first allege a “material misrepresentation or omission by the defendant.” However, not all material omissions give rise to a cause of action. Here, Plaintiffs focus on statements about the importance of protecting customer data; privacy statements on Defendant's website; and cybersecurity-related risk disclosures. The court found that Plaintiffs failed to allege that any of the challenged statements were false or rendered Defendant's public statement misleading. Although Defendant could have disseminated more information to the public about its vulnerability to cyberattacks, federal securities law does not require it to do so. View "Construction Laborers Pension Trust Southern CA v. Marriott International, Inc." on Justia Law

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The Fourth Circuit considered for the second time the Wikimedia Foundation's contentions that the government is spying on its communications using Upstream, an electronic surveillance program run by the NHS. In the first appeal, the court found that Wikimedia's allegations of Article III standing sufficient to survive a motion to dismiss and vacated the district court's judgment to the contrary. The district court dismissed the case on remand, holding that Wikimedia did not establish a genuine issue of material fact as to standing and that further litigation would unjustifiably risk the disclosure of state secrets.The court concluded that the record evidence is sufficient to establish a genuine issue of material fact as to Wikimedia's standing, and thus the district court erred in granting summary judgment to the government on this basis. However, the court concluded that the state secrets privilege prevents further litigation of this suit. Furthermore, Wikimedia's other alleged injuries do not support standing. View "Wikimedia Foundation v. National Security Agency/Central Security Service" on Justia Law

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In 1994, a California corporation purchased and registered the domain name and trademarks for “France.com.” Twenty years later, the corporation initiated a lawsuit in France, challenging a Dutch company’s use of the France.com trademark. The French Republic and its tourism office intervened, seeking to protect their country’s Internet identity and establish its right to the domain name. French trial and appellate courts declared the French Republic the rightful owner of the domain name. In the U.S., the corporation sued the French entities, which asserted sovereign immunity under the Foreign Sovereign Immunities Act (FSIA), 28 U.S.C. 1604. The district court denied a motion to dismiss, concluding that immunity “would be best raised after discovery.”The Fourth Circuit reversed, directing the district court to dismiss the complaint with prejudice. The court concluded that it had jurisdiction over the appeal because the district court rested its order not on a failure to state a claim but on a denial of sovereign immunity, which constitutes an appealable collateral order. Neither FSIA’s “commercial activity” exception nor its “expropriation” exception applies. It is not clear that the French State’s actions in obtaining the website in judicial proceedings constitute “seizure” or an “expropriation” and they clearly do not constitute “commercial activity.” The corporation itself invoked the power of the French courts; only because it did so could the French State intervene in that action to obtain the challenged result. View "France.com, Inc. v. The French Republic" on Justia Law

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In the underlying action, a customer purchased a headlamp on Amazon's website from a third party seller and then gave it to friends as a gift. After the headlamp's batteries malfunctioned and ignited the friends' house on fire and caused over $300,000 in damages, the insurer of the house paid the loss and, as subrogee, filed suit against Amazon alleging claims of negligence, breach of warranty, and strict liability tort. The insurer argued that Amazon was liable under Maryland law because it was the "seller" of the headlamp. The district court granted summary judgment to Amazon and held that Amazon was immune from suit.The Fourth Circuit held that, although Amazon was not immune from suit under the Communications Decency Act, 47 U.S.C. 230(c)(1), Amazon was not the "seller" of the headlamp and therefore did not have liability under Maryland law for products liability claims asserted by reason of the product's defective condition. The court explained that insofar as liability in Maryland for defective products falls on "sellers" and manufacturers (who are also sellers), it is imposed on owners of personal property who transfer title to purchasers of that property for a price. In this case, there was no evidence to dispute that when Dream Light shipped its headlamp to Amazon's warehouse in Virginia, it was the owner of the headlamp. Furthermore, when Dream Light transferred possession of the headlamp to Amazon, without Amazon's payment of the headlamp's price or an agreement transferring title to it, Amazon did not, by that simple transfer, receive title. There was also no action or agreement that amounted to the consummation of the sale of the headlamp by Dream Light to Amazon. Accordingly, the court affirmed in part and reversed in part. View "Erie Insurance Co. v. Amazon.com" on Justia Law

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The Fourth Circuit affirmed the district court's judgment concluding that defendant, chair of the Loudoun County Board of Supervisors, violated the First Amendment rights of one of her constituents, Brian Davison, when she banned Davison from the "Chair Phyllis J. Randall" Facebook page she administered. The court held that Davison had standing because she adduced facts establishing an injury in fact sufficient to justify the prospective declaratory relief awarded by the district court; considering the totality of these circumstances, the district court correctly held that defendant acted under color of state law in banning Davison from the Chair's Facebook Page; and the interactive component of the Chair's Facebook Page constituted a public forum, and defendant engaged in unconstitutional viewpoint discrimination when she banned Davison's page from that forum. In regard to Davison's cross-appeal, the court rejected his assertion that the district court reversely erred by dismissing his claim against defendant in her official capacity and by denying his motion to amend. View "Davison v. Randall" on Justia Law

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Rather than broadcasting in real time over satellite or cable, Internet Protocol Television (IPTV) stores programming on servers and delivers content digitally over a high-speed network. Sky received third-party content at its satellite substation, transcoded it, and transmitted it to NeuLion’s servers via a private line. NeuLion sent the encoded signals over the public internet to subscribers’ set-top boxes, relying on third-party internet connections. Sky wanted Discovery programming. Sky stated it would not transmit Discovery content over the public internet. Discovery’s engineer advised that while it was possible to use a closed fiber-optic network, he had “concerns that it may be going over the Internet” which could present “rights issues.” The final agreement described "a multichannel video distribution system which utilizes Internet Protocol (IP) technology to deliver video programming services over a closed and encrypted transmission path over a national fiber-optic network to a central location for subsequent distribution of such video programming services with proprietary encoding over a high-speed data connection to set-top-boxes that are secured by industry-standard encryption and conditional access technologies and are connected to Subscribers’ television sets." Discovery terminated the contract after learning Sky used the “public internet.” The court held the agreement was susceptible to competing reasonable interpretations concerning the scope of Sky’s distribution rights, examined extrinsic evidence, and found no support for Sky’s claim that the contract permitted public internet distribution. The Fourth Circuit affirmed. The contract allowed Discovery to terminate at any time it became dissatisfied with Sky ’s method of distribution; Discovery did not act in bad faith. View "Sky Angel U.S., LLC v. Discovery Communications, LLC" on Justia Law

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Rather than broadcasting in real time over satellite or cable, Internet Protocol Television (IPTV) stores programming on servers and delivers content digitally over a high-speed network. Sky received third-party content at its satellite substation, transcoded it, and transmitted it to NeuLion’s servers via a private line. NeuLion sent the encoded signals over the public internet to subscribers’ set-top boxes, relying on third-party internet connections. Sky wanted Discovery programming. Sky stated it would not transmit Discovery content over the public internet. Discovery’s engineer advised that while it was possible to use a closed fiber-optic network, he had “concerns that it may be going over the Internet” which could present “rights issues.” The final agreement described "a multichannel video distribution system which utilizes Internet Protocol (IP) technology to deliver video programming services over a closed and encrypted transmission path over a national fiber-optic network to a central location for subsequent distribution of such video programming services with proprietary encoding over a high-speed data connection to set-top-boxes that are secured by industry-standard encryption and conditional access technologies and are connected to Subscribers’ television sets." Discovery terminated the contract after learning Sky used the “public internet.” The court held the agreement was susceptible to competing reasonable interpretations concerning the scope of Sky’s distribution rights, examined extrinsic evidence, and found no support for Sky’s claim that the contract permitted public internet distribution. The Fourth Circuit affirmed. The contract allowed Discovery to terminate at any time it became dissatisfied with Sky ’s method of distribution; Discovery did not act in bad faith. View "Sky Angel U.S., LLC v. Discovery Communications, LLC" on Justia Law