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

Articles Posted in Internet 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

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OpenRisk filed suit against MicroStrategy after MicroStrategy continued to provide services to OpenRisk's ex-employees after they had left and formed a new company. The Fourth Circuit affirmed the district court's grant of summary judgment to MicroStrategy and held that the federal Copyright Act preempted OpenRisk's computer fraud claims under the Virginia Computer Crimes Act (VCCA). The court explained that the core of OpenRisk's VCCA claims was the unauthorized copying and transfer of its data, and that claim was "equivalent to" a copyright infringement action and was thus preempted. The court also held that MicroStrategy was entitled to summary judgment on OpenRisk's remaining claims of computer trespass, tortious interference, and conspiracy. View "OpenRisk, LLC v. MicroStrategy Services Corp." on Justia Law

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Verisign filed suit against XYZ and its CEO Daniel Negari, alleging that defendants' statements regarding the scarcity of desirable .com domain names violated the Lanham Act's, 15 U.S.C. 1125(a)(1)(B), false advertising provisions. The district court granted summary judgment in favor of XYZ. The court agreed with the district court that Verisign failed to establish the elements of a Lanham Act claim. In regard to XYZ's self-promoting statements, the court held that Verisign failed to produce the required evidence that it suffered an actual injury as a direct result of XYZ’s conduct. Nor can Verisign establish that XYZ’s statements about the availability of suitable .com domain names were false or misleading statements of fact. Accordingly, the court affirmed the judgment. View "VeriSign v. XYZ.com" on Justia Law

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Beyond Systems, an internet service provider, filed suit against Kraft and Connexus seeking damages under California's and Maryland's anti-spam statutes based upon several hundred e-mails which it alleges were unlawful spam. As a preliminary matter, the court concluded that Beyond Systems had Article III standing by claiming a harm: receiving spam e-mail. On the merits, the court agreed with the district court that Beyond Systems is barred from recovery because it consented to the harm underpinning its anti-spam claims. In this case, Beyond Systems created fake e-mail addresses, solely for the purpose of gathering spam; it embedded these addresses in websites so that they were undiscoverable except to computer programs that serve no other function than to find e-mail accounts to spam; it increased its e-mail storage capacity to retain a huge volume of spam; and it intentionally participated in routing spam e-mail between California and Maryland to increase its exposure to spam and thereby allow it to sue under both states' laws. Accordingly, the court affirmed the judgment of the district court. View "Beyond Systems v. Kraft Foods" on Justia Law

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Lavabit, a company that provided encrypted email service, and Ladar Levison, the company's sole and managing member, appealed the district court's order of contempt and imposition of monetary sanctions because Lavabit and Levison failed to comply with the Government's court orders under both the Pen/Trap Statute, 18 U.S.C. 3123-27, and the Stored Communications Act, 18 U.S.C. 2701-12, requiring Lavabit to turn over particular information related to a target in a criminal investigation. The court concluded that the district court did not err in finding Lavabit and Levison in contempt once they admittedly violated the order. In view of Lavabit's waiver of its appellate arguments by failing to raise them in the district court, and its failure to raise the issue of fundamental or plain error review, there was no cognizable basis upon which to challenge the order. Accordingly, the court affirmed the judgment of the district court.View "United States v. Lavabit, LLC, et al." on Justia Law