Archive for the 'Business Law' Category

Facebook Faces Backlash for Livestream Murder

Random acts of violence are truly devastating, but they are even worse when they’re livestream on Facebook and shared thousands of times for the world to see. Robert Godwin Sr., a 74-year-old male from Cleveland, Ohio, was murdered in cold blood on Easter Sunday by Steve Stephens, a 37-year-old Facebook user. Stephens reportedly walked up to Godwin and shot him while videotaping the murder. Stephens later posted the video, captioned “Easter day slaughter,” to his Facebook page. The video was shared several thousand times.

Godwin’s family is still trying to process the death, but his family feels the weight of his murder with each new “share” of the video.

FacebookFacebook’s Response

After being alerted to the gruesome video, Facebook removed it, but only after it had been on their social media platform for two hours. Facebook also removed Stephens’ personal page.

Facebook received harsh criticism for not removing the violent content quicker. Facebook’s Vice President of Global Operations conceded their response was much too slow. According to Facebook, they didn’t receive the first report about the video until an hour and 50 minutes after the incident. Less than 20 minutes after the video of the murder was uploaded, someone reported a separate five-minute Facebook Live video of Stephens confessing to the murder.

Facebook said it would be “reviewing [their] reporting flows to be sure people can report videos and other material that violates [their] standards as easily and quickly as possible.” Currently, Facebook doesn’t actively search for inappropriate content. Instead, it waits for someone to flag it as inappropriate before they act.

CEO Mark Zuckerberg announced in February that the company was working on artificial intelligence to help detect video content, but it was very early in development.

How Can Facebook Regulate Violent Content?

Facebook has become the social media powerhouse of the 21st Century. What was once created just for college students to connect with their friends is now used by the masses. It continues to take risks to pave the way among its competitors (Instagram, Twitter, Snapchat). Facebook Live is its newest feature that allows users to post live videos.

As discussed, Facebook does not have the ability or manpower to actively search for inappropriate or violent content. This is not surprising considering at last count in March Facebook had over 2 billion users worldwide. Once they are notified of violent or inappropriate content, they act quickly to remove the content and deactivate the offending person’s personal page.

Can Facebook Be Liable?

In a word, no. Facebook has no ability to control other people’s actions or read the minds of their users. It could not have anticipated that Stephens would murder someone on Easter Sunday and post the video on Facebook.

But what if Stephens posted a Facebook Live video 24 hours before the murder, declaring, “I’m going to murder someone on Easter Sunday.” What then?

The answer is still “no,” but liability is a little more murky. Let’s say someone noticed the video two hours after it was posted and reported it to Facebook. If Facebook did nothing – did not suspend the account, remove the video, or contact authorities as to the possibility of a murder – then wouldn’t Facebook have a responsibility to act? No, there is no law requiring Facebook to report a potential crime. But they’d probably be have some fallout with the public.

Facebook Videos and The Future

Critics of Facebook suggest there should be laws to limit one’s ability to post videos. This is especially true since people have started to post all sorts of things, including videos moments before committing suicide. A recent teenage couple committed suicide days apart. The boyfriend posted his parting thoughts, clearly riddled with pain and anguish, before he said, “I’m trying to get out all the words before I go.”

Any limitation on Facebook users’ ability to post could be an infringement of free speech under the U.S. Constitution.

The problem is that technology is ever changing. Companies like Facebook and Instagram are paving the way in social media, but the laws have not quite caught up to their advancements.

Tesla is in Hot Water Over Self-Driving Cars

When you about technologies of today which were once thought of as the realm of science fiction you think about 3-D printing, you think the levels we’ve reached with AI, and on that note–you think of self-driving cars.  From the silver screen to reality, the past couple years have seen enormous leaps forward in the technology behind autonomous vehicles.  That surge in technology, however, has been accompanied by a surge in lawsuits as states scramble to figure out laws to properly regulate how self-driving cars can be made, handled, and sold.  Uber has seen many a legal challenge-mostly due to their unwillingness to purchase permits-as they have rolled out self-driving cars. When Google was first testing their self-driving technology, they narrowly missed traffic tickets after a police pulled their test car over.  The reason?  The new car was only safe to drive at below 25 miles per hour so it was going 24 in a 35 zone-the officer didn’t end up giving the car a ticket.  Now, having just barely entered the market, it seems like it’s Tesla’s turn to potentially face some legal hot water over the technology.

Tesla unveiled its self-driving technology back in 2014.  However, it wasn’t until October of last year that cars with the feature were actually sold.  The feature has been dubbed Autopilot 2 and costs about $5,000 extra.   Just a few days ago, a class action lawsuit was initiated against Tesla.  The suit alleges that Tesla’s driverless technology is so unsafe as to violate consumer protection and unfair practices laws.  As the technology becomes more commonplace, lawsuits like these were nearly inevitable.  With that in mind, let’s take a look at the lawsuit against Tesla and the state of the law when it comes to driverless cars.

TeslaIs Autopilot Dangerous?

The lawsuit, brought in Federal Court in California’s Northern District, includes plaintiffs from Colorado, New Jersey, and Florida.  It includes allegations of violations of consumer protection laws of all three of those states.

The lawsuit accuses Tesla of many illegal practices.  It alleges that they are selling “vaporware,” a colloquial term for software that is advertised but non-existent.  The lawsuit alleges the Tesla advertised many upcoming safety and functionality features of their self-driving software that simply never materialized. They also say that salesmen at Tesla dealerships told plaintiffs that features that were upcoming were already part of the software.  Instead of the software they were promised, the lawsuit alleges that the using the Autopilot 2 software as is is dangerous-comparing the function to the quality of driving one would expect from a drunk driver.  They point to a specific review of the software which described the car serving across double yellow lines and nearly hopping the curb.  They point to other reviews which describe sudden hard stops at 50 MPH.  They describe plaintiffs as flabbergasted to learn that their cars couldn’t yet change lanes or exit the freeway without assistance, despite apparently being told this function was available in Tesla marketing materials.  They also describe individual experiences of plaintiffs where their cars behaved erratically while on autopilot mode.

Based on this, the lawsuit accuses Tesla of false and misleading advertising-something protected against in essentially every consumer protection statute; along with false advertising, and protections against defective products.  The statutes in the case follow the usual requirements for a claim of false advertising: knowingly making false representations about a product, with the capacity or tendency to deceive the consuming public and convince them to buy the product, with the intent to get people to buy that product.

The lawsuit also charges Tesla with violations of the Motor Vehicle Safety Act (requiring immediate action from manufacturers where a safety defect poses an unreasonable risk of death or injury in an accident) and fraud by concealment (the deliberate hiding or suppression of an important fact with the intent to deceive).

So basically, the lawsuit is saying that the marketing materials of Tesla’s Autopilot 2 feature drastically overstated what the software was actually capable of-both as initially delivered and by missing self-imposed deadlines to provide improved functionality-instead giving buyers a product so incomplete as to be dangerous to use.  If true, this is a classic case of consumer fraud.  However, as you might imagine, Tesla has a very different description of the situation.

First and foremost, Tesla says that the lawsuit misrepresents many of the facts as to both their advertising and the functionality of Autopilot 2.  In fact, they say that many of the features that are said to be unavailable in the lawsuit actually are available and that the features that the plaintiff’s thought would be there were clearly labeled as upcoming in marketing materials

With such diametrically opposed versions of the facts, it’s hard to say exactly what the chances are of a lawsuit like this.  As you might imagine, both side’s versions of the facts are likely to hand them a swift victory.  Should the plaintiffs win, their lawsuit asks for Tesla to purchase back their cars and provide unspecified amounts of damages-likely an amount determined by the individual consumer fraud statutes-for their advertising practices.  We’ll have to see how the facts shake out before making a prediction one way or another.  Tesla’s website does indeed have descriptions of many elements of Autopilot 2 as upcoming.  However, the question is what these particular clients were told and the particular marketing materials they were provided.  What’s more, while Tesla did miss a number of deadlines for improving Autopilot 2 to bring the product into parity with other self-driving vehicles, their marketing materials do seem to say that they cannot always hold to deadlines due to the extensive work and regulatory approval required for self-driving cars.  However, it’s still too early to say exactly who is going to come out on top here.

The Law on Driverless Cars

Part of the problem with lawsuits surrounding autonomous vehicles is that the law is still trying to catch up to technology somewhat.  That being said, there has been a boom in laws regulating self-driving cars.  Not so long ago, Michigan passed some of the most comprehensive-although quite lenient-laws on the issue seen to date.

This is far from the only set of laws regulating self-driving cars.  California, Arizona, Alabama, Pennsylvania, Virginia, Nevada, Utah, North Dakota, Louisiana, Tennessee, Florida, Massachusetts, Washington D.C., and Virginia all have laws or executive orders in place regulating the use of autonomous vehicles to some extent.  In September of 2016, even the federal government–through the National Highway and Transportation Safety Administration–released an updated set of suggestions providing guidance for states in making laws.

Tesla, and other manufacturers of self-driving cars, are entering a market ahead of its time; but the laws are catching up.  More and more legislation is being introduced to figure out how to handle these kind of vehicles.  However, as this lawsuit suggests, we need to make sure that the technology is there and up to snuff before it reaches the public.  As it stands, both sides are so far apart that it’s hard to take much in the way of facts away from the pleadings and their response.  At a minimum, we can see that it is a technology in progress and-like any technology in process-we have to be careful how we implement it to ensure the safety of the public.

Trump Repeals Internet Privacy

For someone who ran for President on a platform promising to “Make America Great Again,” he sure has done a lot of things to make Americans feel like we’ve moved backward, not forward. Since January 20th, President Trump has turned away refugees, encouraged the defunding of Planned Parenthood, and acted personally and professionally sexist toward women. His new bill that he quietly signed into law repeals internet privacy rules passed last year by the Federal Communications Commission (“FCC”) under the Obama administration. It seems like another huge step backward.

TrumpWhat Did the Internet Privacy Law Do?

Adopted on October 27, 2016 and issued on November 2, 2016, the FCC established a rule that protected the privacy of customers of broadband and other telecommunication services. It also gave broadband customers more choices, transparency, and security over their personal data. The rule empowered users to decide how data was used and shared by broadband providers. In other words, it forced internet service providers (Comcast, Xfinity, AT&T, and Verizon, to name a few) to ask consumers before it collected certain personal information.

Why Is the Privacy Rule Important?

The rule has not gone into effect yet, and it won’t go into effect now that Trump has repealed it. However, the law was intended to require more transparency by internet service providers. Companies use data to target advertising. This is known as data mining, sometimes known as data or knowledge discovery. It is the process of analyzing data and summarizing it into useful information. The information is then sold from the internet service providers to specific companies that target their advertising to the consumer based on their data.

That was complicated, so let me give you an example. I’m a new mom and my internet service provider can ascertain this information through my search habits. Let’s say they sell that information to Babies R’ Us, Carter’s, and other baby stores, who then sends me coupons for various deals on car seats, baby toys, and diapers. My internet service provider just profited off of invading my privacy.

Why We Haven’t Heard about the Law

Trump has been acting like a bull in a china shop, signing controversial executive orders with big hoopla and making unfounded allegations about his predecessor President Obama. Why, then, have we heard very little about his decision to repeal the internet privacy law, especially when it has such a huge effect on the American people?

It seems that the Trump administration tries to sneak anything controversial or unpopular quietly into law. That way, there’s less backlash.

Should We Be Worried about Net Neutrality?

In 2014, the FCC released a plan that would have allowed internet service providers such as AT&T, Comcast and Verizon to charge more depending on what the consumer uses. For instance, instead of providing things like Facebook and Youtube for free so long as you have internet access, big companies want to sell package deals that allow one access to Facebook and Youtube only if they use their company and buy a particular package. The proposal was met with so much resistance that it was shelved.

Net neutrality is the principle that treats all websites and services the same. Specifically, it prevents certain internet service providers from charging more for specific content. It prevents companies like Comcast from charging users for a package subscription to Netflix and Hulu.

People are concerned that Trump’s repeal is just one step away from the end of net neutrality, and they should be concerned. Trump is a well-known businessman. His failed Trumpcare attempted to create huge tax breaks for the super wealthy. He’s appointed cabinet members who primarily favor big business. It should come as no surprise that this President may attack net neutrality when he has consistently shown preferential treatment toward big business at the expense of “the little people.”

United Faces a Beating… in Court

Over the last week, the news (and many videos) of one Dr. David Dao being brutally attacked by Aviation Security Officers and dragged from his legally purchased seat on United Flight 3411 has been absolutely everywhere.  The incident has caused a firestorm of public outrage against United.

For those who have not seen the videos or read the news, passengers of Flight 3411 from Chicago to Louisville were told before boarding that the flight had been overbooked (United had sold more tickets to the flight than there were seats on the plane) and asked for volunteers to take $400 and a hotel stay to take a flight the following day.  This was apparently resolved, and the passengers were allowed to board the plane.  However, after the flight was boarded, United decided that it wanted four seats to fly employees to Louisville for their work on a flight the following day–it should be noted that the drive to Louisville is just over four hours.  United again requested volunteers to get off the plane, then when nobody was willing upped their offer to $800.  However, there was still nobody willing to get off.   Finally, United had a computer randomly select people to be kicked off the plane.  Dr. Dao was one member of the second couple to be randomly selected.

Dr. Dao refused to get off the plane and security was called to remove him–and remove him they did.  The footage from the many recordings made by other passengers on the flight show Dr. Dao’s head being slammed into the armrest next to him before he is pulled from his seat and, as onlookers scream in horror, his motionless form is dragged down the aisle of the plane–mouth bleeding, glasses askew, and shirt riding up his belly.  After this happened, the passengers were all removed from the plane so United employees could clean up the blood before the plane took off.

Since then, Dr. Dao has retained attorneys and has filed a motion to preserve evidence from the incident for a future lawsuit.  His attorneys report that he suffered a concussion, lost two front teeth, had his nose broken, and his sinuses were so badly damaged that he will require reconstructive surgery.

So the question is, how the heck did this happen in the first place?  The answer may surprise you, airlines have an enormous amount of leeway in a post-9/11 world.  So, with this in mind, let’s look at the law here and Dr. Dao’s chances in his upcoming lawsuit.

Airlines Overbooking and Booting Paying Customers

As anybody who’s flown in the last few years can attest, overbooking flights is an extremely common practice nowadays.  The heartbreak and annoyance of buying a ticket months in advance then being told that an airline sold more tickets than there were seats happens all the time-but it rarely escalates as far as it did in this case.

Almost every major airline currently intentionally overbooks the majority of its flights for the simple reason that it usually makes them more money than it loses them–despite how awful that is from a customer service standpoint.  The reason for this is not only the careful algorithms these airlines apply to overselling their flights, but also because these airlines are protected under both the contract you agree to and-believe it or not-federal law.

First and foremost, when you buy a ticket you are essentially agreeing to a contract with the airlines.  You best believe this contract gives the airlines enormous leeway to, among many other things, boot you off a plane.

United’s contract, a behemoth at just a bit over 37,000 words long, specifically says that when a flight is oversold passengers may be “denied boarding involuntarily.”  Overbooked is defined in their contract as when there are more passengers with valid confirmed tickets than seats before check-in time.  “Passenger” is defined as any non-crew person holding a confirmed registration.  The contract also gives them the right to boot disruptive or violent passengers–or to boot passengers for any number of other reasons.

When you buy an airplane ticket, you’re usually agreeing to something like this–United or no.  In fact, almost every major airline–with the notable exceptions of JetBlue and Virgin America–have some sort of provision allowing them to “deny boarding involuntarily.”

Code of Federal Regulations § 250.5–titled “Amount of denied boarding compensation for passengers denied boarding involuntarily”–not only allows this but substantially limits the amount an airline needs to pay out to a booted customer.  This makes overbooking even more appealing to airlines.  All the provisions require is that any involuntarily booted passenger be provided notice in writing (see the contract you totally read when you bought the ticket) and they are compensated.  However, compensation is limited to a maximum of 200% of the one way value of the ticket ($675 maximum) if the airline offers alternative transportation and 400% ($1,350 maximum) if they don’t.  If the alternative transportation is less than an hour away–they don’t have to give you anything.  They can even offer you vouchers for their own flights in lieu of cash or check in some situations–read most situations.

This is pretty cheap for the rare occasion where the airlines actually have to pay out, so it’s no surprise they aren’t shy about overbooking.  Since the United incident occurred, the Department of Transportation has said that they are reviewing whether overbooking rules were followed here–but they doubled down on the legality of bumping passengers and are not reviewing the rule in place.

UnitedDr. Dao’s Lawsuit

So, United can bump people off planes.  They can even do it involuntarily.  However, you’ll notice that there are a few issues in their contract that are definitely going to come up in any lawsuit with Dr. Dao.

First, they are allowed to boot passengers where a plane is overbooked–but was the plane overbooked by their own definition?  There were the exact same number of paying customers as there were seats, United just wanted to jam in four of its employees.  The question is, were these employees passengers?  If they count as crew they definitely were not.  What’s more, if they didn’t have a boarding pass at time of check-in it’s unlikely they’d count as a passenger.  If the flight wasn’t overbooked, then United didn’t have the right to boot Dr. Dao in the first place.  If Dr. Dao was being disruptive or belligerent, United may still have grounds under their contract to remove him from the plane.  However, despite the police report describing him as “irate” the videos and passenger accounts put him calmly on the phone with what turned out to be his attorney.  There is some question over the mere act of refusing to disembark from the plane was sufficient to give United grounds under their contract to remove Dr. Dao.

This being said, if remove Dr. Dao from the plane was all United did this would be much less of a media explosion–the Aviation Security Officers seriously injured Dr. Dao.  The contract you sign with United absolutely does not give them the right to assault, batter, or intentionally inflict emotional distress upon a passenger.    These are all civil torts which could Dr. Dao could use as a cause of action against United.

However, even these actions might have a bit of a hiccup.  The question would become whether the Aviation Secutity Officers acted as agents of the airline or in their own independent capacity as police officers.  If the officers were not acting as agents of the airline-or it can found that the airline sanctioned them to use such force in removing Dr. Dao-then the airline is unlikely to be held liable for the actions of their officers.

In this case, Dr. Dao may need to sue the police department of Chicago itself.  One would expect that, if and when a lawsuit finally does come there would be lawsuits target both United and the police department.  Police acting in their official capacity enjoy a certain level of immunity to lawsuits.  However, if it can be shown that the use of force was excessive here–an analysis made by looking at, among other things, standard police procedure and the level of threat posed by a suspect–Dr. Dao may still be able to bring a case.

Since the incident, the three Aviation Security Officers who attacked Dr. Dao have been placed on paid leave.  However, it is worth noting that the general procedure for the security officers is to–where there is no imminent threat–contain the situation until the officers from the Chicago Police Department arrive.  In fact, according to a deputy commissioner overseeing airport security, the protocol for Aviation Security Officers is apparently to not even go on the plane if it’s a customer service issue.  While at least one of the Aviation Security Officers wore a jacket reading “police,” they are not actual police officers and the practice of wearing such a jacket was banned a few months back.

All of this points to excessive force, a situation unnecessarily escalated in violation of standard protocol.  This would strengthen any case brought by Dr. Dao.

Almost Certain to Settle

You can see that, while Dr. Dao has several causes of action with merit, none of them are without their issues.  However, it’s very unlikely to reach that point.  This whole situation has been a PR nightmare for United and they have been judged in the court of public opinion–this is not the sort of case they are likely to want to bring before a jury.  Dollars to donuts says a settlement will be forthcoming.

Since the video hit the internet, United lost around a billion dollars in value before recovering to a mere quarter of a billion loss.  The CEO of United, Oscar Munoz, has been all over the news apologizing for the incident, although he has been doing a fairly poor job of it–first describing Dr. Dao’s beating as a “re-accomodation,” then telling United employees he thinks they did nothing wrong and calling Dr. Dao “belligerent”, then finally making an unequivocal apology.  He’s since been on television promising that United would never again let law enforcement remove a “booked, paid, seated passenger”–although he had no promises regarding overbooking in general.  Mr. Munoz has also publically stated that Dr. Dao cannot be at fault for what happened and should not have been treated like he was.  These are not the responses of somebody looking to go the long haul on a lawsuit with Dr. Dao.  I would expect a settlement to hit the news sooner rather than later.

Disney to Pay Out $3.8M in Wage-an-Hour Lawsuit

A little over a week ago saw news of an immense payout as Disney agreed to pay $3.8M to employees of their many resorts and timeshares.  The agreement comes after the United States Labor Department began an investigation into Disney which concluded that they routinely failed to pay employees for around fifteen minutes of work performed before and after their shifts.  Disney was also accused of deducting the expenses of uniforms from employees pay in such a manner that it would occasionally make it so that an employee received less than the minimum wage.

This agreement covers an enormous number of employees, well over sixteen thousand workers.  Thus, this payout isn’t quite as immense as it initially appears–coming out to a bit over $200 per employee.  However, it’s a good example of one of the most common types of legal action in the U.S. –wage-an-hour conflicts.  With this in mind, we’re going to look at exactly what wage-an-hour is and how it works to help you protect your rights as an employee or protect your business from costly lawsuits.

How Wage-an-Hour Works

Wage-an-hour lawsuits generally fall into a couple of categories.  First, where an employee isn’t being paid minimum wage–an obvious violation.  An extension of these lawsuits is what happened in the case of Disney, not paying employees whatsoever for hours worked.  Clearly, zero dollars is below the minimum wage anywhere in the country .  Second, where a company fails to pay their employees overtime hours which they are owed.

DisneyThe Fair Labor Standards Act (FLSA) guarantees each employee will be paid the federal minimum wage throughout the country, currently $7.25 an hour.  However, almost every state has their own individual law which is quite similar to the FLSA.  Minimum wage obviously varies a fair bit from state to state, as does the approach each state takes to enforcing minimum wage.  However, while the legal procedures of pursuing a case may vary a bit state to state, all the cases come down to establishing that you were not paid minimum wage for time worked.  This includes salaried positions where your salary paid divided by your hours worked comes out to less than minimum wage.  There are a couple exceptions to this general rule under the FLSA and many state laws: where tips compensate for what would otherwise be pay below minimum wage, student learners, and employees in training.  Not all of these exceptions are mirrored on the state level, and many of them are quite controversial in effect as they essentially allow pay well below a living wage.  Where an employer fails to pay minimum wage, an employee may sue them–or in many states file an action with a government organization specifically designated to handle such actions–and receive the pay they are due within the time period of the statute of limitations along with potential additional damages through state statutes.  Disney’s agreement bypassed any legal action, instead simply agreeing to pay a fixed amount in reparation for their failure to pay for all the hours their employees worked.

The second common wage-an-hour action, failure to pay overtime, does not particularly apply in Disney’s case.  However, it is important to know as cases dealing with unpaid overtime are extremely common.   Overtime generally includes any hours in excess of 40 in a week, 8 hours in a day, or being required to work more than 6 consecutive workdays.  Where you work overtime, an employer must pay generally pay you time and a half–although some states have situations where an employer must pay an even higher multiplier of your base wage.  There are situations where an employee may be exempt from overtime–most commonly where they receive pay of over $455 per week and have duties -usually within specific statutory categories–which require a certain amount of independent decision making in performing work.  Each state has a different approach to exactly when a position is overtime exempt, and more recently it’s been an issue targeted at the federal level as well.

The Importance of Keeping Complete Records

Disney’s case focuses on failure to pay for time worked, and there was apparently a fair bit of evidence to this point.  However, Disney is rather well known as a particularly litigious company.  So you might be asking yourself, why didn’t Disney fight it out?  The answer may be in the record-keeping practices of the resorts the employees worked at.

The FLSA requires employers to keep accurate records of the hours their employees work as well as wages earned.  These recordkeeping requirements can become more involved from state to state, and even the FLSA has some more specific requirements.

This requirement to keep proper records has sunk many an employer’s chances in a wage-an-hour case.  This is because, where an employer fails to keep proper records, employees can rely on representative evidence to establish the hours they’ve worked. This evidence only needs to be sufficient for a reasonable inference that the employees’ evidence is an appropriate approximation of the hours they worked.  For this reason, it is incredibly important for an employer to keep legally compliant records.  If they don’t, their employees basic approximations of time worked in what format they can provide it–from testimony to crudely kept notebooks–will determine what hours the court will consider that they worked.

Apparently, Disney’s resorts failed to keep statutorily compliant records of the hours worked by many of the employees in the class action lawsuit brought against them.  This likely was the straw that broke the camel’s back when it came to deciding whether to fight the case against them.  Without properly maintained records their chances of success dropped precipitously, they likely simply decided that around $200 per employee wasn’t too much to pay in light of the expenses of litigation and their chances of success.  So as an employer, remember, if bad record keeping can sink Disney it definitely will do you no favors.  As an employee pursuing a wage-an-hour case, if it sank Disney it’s worth determining whether your employer has kept sufficient records if you believe you have been paid unfairly.