Another antitrust verdict hits forest-products firm

A year after the U.S. Supreme Court tossed out a $79 million antitrust verdict against it, Weyerhaeuser has this week been hit with another antitrust judgment by a jury in Portland - this time in the amount of $28 million, which will be trebeled to $84 million.  While the earlier case involved a claim by Weyerhaeuser's competitors in the alder mill business, this time the plaintiffs are a group of customers who purchased finished alder lumber.  Those plaintiffs contend that Weyerhaeuser monopolized the market for finished alder logs, illegally raising prices charged to plaintiffs.

See news coverage of this week's verdict here and here.  And see our coverage of last year's Supreme Court ruling here. 

Employers face litigation over tip policies

Proper handling of employee tips has emerged as a hot issue in employment litigation.  Last month, a San Diego superior court judge ruled that Starbucks Corp. must pay more than $100 million to  compensate thousands of baristas after allowing supervisors to share in the tip pool.  Chou v. Starbucks Corp., No. GIC836925 (San Diego Co., Calif., Super. Ct.).  In recent weeks, similar suits have been filed against Starbucks in Massachusetts, Minnesota, and New York.  In a federal lawsuit, DiFiore v. American Airlines, that returned a jury verdict earlier this month, nine American skycaps were awarded $325,000 after they alleged a new $2 per baggage fee for curbside check-in-service diminished their tips.  A similar suit against U.S. Airways Group Inc., Mitchell v. US Airways, was filed on April 11.

In the California Starbucks case, a former barista sued Starbucks over the company's policy of pooling tips and sharing them with managers and supervisors.  The case was later certified as a class action.  The plaintiffs' claims included a contention that the policy violates California Labor Code 351, which states no employer or agent can collect tips that customers leave for servers.

In federal court, employees claim that an employer violates the Fair Labor Standards Act if employees who are paid less than minimum wage do not receive enough in tips to make up the difference.  In a case filed against Ruth's Chris Steak House Inc., employees who work for less than minimum wage claim they spend more than 20% of their time folding napkins, cleaning tables and doing other tasks that don't generate tips.

The lesson for employers is clear:  Be alert to how you distribute employee tips.

Seventh Circuit rejects liability for craigslist housing ads

Interpreting the law protecting providers of interactive computer services from liability for content provided by others, the Seventh Circuit recently held that the online service craigslist may not be liable under the Fair Housing Act for discriminatory housing ads appearing on its site. 

In Chicago Lawyers' Committee for Civil Rights under Law, Inc. v. craigslist Inc.,  the court last month held that the Communications Decency Act, 47 U.S.C. sec. 230(c)(1), prevents craigslist from being considered the "publisher or speaker" of information provided by users who post content to its website.  In rejecting the plaintiff's argument for liability, the court stated that Section 230(c)(1) barred the Fair Housing Act claims.  Accordingly, craigslist could not be held liable as the "messenger," even though the message was one of unlawful discrimination.  To read our earlier coverage of this case at the trial court level, click here.

More recently, the Ninth Circuit reached the contrary result in a housing discrimination case against roommates.com, holding that the roommate matching service may be subject to liability for discriminatory content on its website.  Read our coverage of that case here.  And read our additional coverage of the Communications Decency Act here.

Washington enacts domestic violence leave for victims and family

The Washington State Legislature passed a new law, effective April 1, 2008, which allows victims of domestic violence, sexual assault, or stalking to take reasonable or intermittent leave from work, paid or unpaid, to take care of legal or law enforcement needs or get medical treatment, social services assistance, or mental health counseling.  Family members of a victim may also take reasonable leave to help the victim obtain treatment or seek help.  An employee may choose to use sick leave and other paid-time off, compensatory time, or unpaid leave time.  The leave under this law is in addition to other rights to take leave available to employees under other regulations.

I Tube, You Tube, We All Tube: Avoiding liability for user-generated content

Thanks to the rapid growth in the public's desire and ability to communicate through the internet, publication of User Generated Content ("UGC") has exploded.  Companies such as YouTube and MySpace are among the businesses that have capitalized on the distribution of online content by the internet audience.  But the use of UGC by companies doing business online can raise difficult legal issues.  Three such issues are copyright infringement, defamation, and violation of privacy rights.

Copyright infringement includes direct infringement, contributory infringement, and vicarious infringement.  Key elements of liability include knowledge of the infringing activity, inducement or contribution to the infringing conduct, and attaining a direct financial interest in the infringing activity when there is an ability to supervise the direct infringer.  Two significant cases alleging copyright infringement as a result of UGC are pending against YouTube (Viacom Intl., Inc. v. YouTube, Inc.) and MySpace (UMG Recordings Inc. v. MySpace Inc.).  These cases may provide an opportunity for the courts to analyze the safe harbor provisions of the Digital Millennium Copyright Act (DMCA),17 U.S.C. sec. 512, specifically section 512(c), which applies to user-directed storage of material on a system.

Defamation is a potential consequence of allowing UGC to be posted on a company's website.  The Communications Decency Act ("CDA") provides tort immunity to internet service providers in certain situations.  While this immunity provision is broad, it has its limits.  To read our earlier coverage of a recent CDA case in which the Ninth Circuit did not shield an on-line service as a result of UGC, click here.

Publication of UGC content can also implicate privacy and publicity rights as a result of the unauthorized use of photos and other media protected by privacy laws.  Common claims for damages include causing embarrassment and damage to reputation.

To minimize liability for the use of UGC, companies should be vigilant about complying with the requirements of the DMCA Section 512(c) safe harbor provision.  Companies utilizing UGC should also seek out licenses from content owners and use comprehensive click-wrap agreements to which  submitting users must agree.  Examples of such agreements can be found on YouTube and MySpace.  Finally, companies choosing to use UGC on their websites should conduct routine scrutiny of the UGC content to ensure liability exposure is minimized.

Article: "Tips and Strategies for Defending Indian Tribal Government IRS Audits"

Ater Wynne's Rob Roy Smith recently authored "Tips and Strategies for Defending Indian Tribal Government IRS Audits," published in the March 2008 issue of the Washington State Bar Association's Indian Law newsletter.  The article discusses the recent change in the mission of the Internal Revenue Services' division of Indian Tribal Governments from education to enforcement, resulting in a dramatic increase in audits.

Communications Decency Act doesn't shield on-line service, Ninth Circuit holds

The Ninth Circuit held yesterday that Roommates.com is not immune under the Communications Decency Act ("CDA") from liability for discriminatory content on its site.  The en banc panel in Fair Housing Council of San Fernando Valley v. Roommates.com held that the roommate-matching site can be subject to liability under the Fair Housing Act for posting discriminatory housing preferences. 

While the CDA shields a provider of an interactive computer service from liability for content provided by others, the court concluded that Roommates.com actively created problematic content by having users complete questionnaires as part of the listing process.  In that sense the web site was not merely a passive service, and it could be sued under the fair housing laws. 

See our earlier coverage of the case here and here. 

Court permanently enjoins patent rule changes

Last fall, a federal district court in Virginia preliminarily enjoined the US Patent and Trademark Office from enacting a suite of new rules. The rules would have limited the number of claims and continuation applications an applicant could file, imposed a search requirement for excess claims, and imposed other limitations and requirements.

Today the court issued a permanent injunction in the case, Tafas v. Dudas, holding that the rule changes were substantive, not merely procedural, and therefore improperly exceeded the USPTO's rulemaking authority.  Further, portions of the rules are invalid because they would apply to already-filed applications, retroactively affecting applicants' rights.

For now the status quo reigns, at least pending an appeal by the USPTO to the Court of Appeals for the Federal Circuit.  But proposed patent legislation currently before Congress, if passed, could dramatically change the statutory landscape underlying this decision.

See our earlier coverage of the case here.