Court Suppresses Email Evidence in Bear Sterns Case
By Stuart K. Tubis – Edited by Jad Mills

U.S. v. Cioffi, et al., Case No. 08-CR-415 (FB) (E.D.N.Y. Oct. 26, 2009)
Slip Opinion (hosted by WSJ)

The Eastern District of New York granted defendant Matthew Tannin’s motion to suppress evidence obtained from his personal Gmail account. Ralph Cioffi and Matthew Tannin were charged with conspiracy, securities fraud and wire fraud in connection with their roles as Bear Sterns hedge fund managers. Prosecutors obtained a warrant to search Tannin’s personal Gmail account, but the warrant failed to specify what evidence could be seized or to what crimes the evidence must relate.  After some initial difficulty, Google delivered a copy of the email account to the Government. As the Wall Street Journal reported, one email contained a comment that funds Tannin managed could “blow up.” Tannin moved to suppress this evidence on the ground that it violated the Fourth Amendment.

District Judge Block held that the warrant was facially overbroad and thus violated the Fourth Amendment. The Court reasoned that because the warrant itself was not particular as to either the items to be seized or to a particular crime, and because the affidavit was not attached or incorporated into the warrant, the warrant was unconstitutional. The court also held that the warrant did not merit a “good faith” or “inevitable discovery” exception, largely because the executing officers should have known the warrant was overbroad.

The Wall Street Journal provides a brief overview of the case. The Eric Goldman Blog also provides a summary of the case. Orin Kerr of the Volokh Conspiracy criticizes the ruling, saying that the good faith exception should have been granted since the case law was not firmly established at the time of execution. (more…)

Ninth Circuit Adopts National Obscenity Standard in Adult Website Spam Case

By Ian B. Brooks – Edited by Alissa Del Riego
United States v. Kilbride, No. 07-10528 (9th Cir. Oct. 28, 2009)
Opinion

The Ninth Circuit has affirmed the District Court for the District of Arizona, which had convicted and sentenced defendants Jeffery Kilbride and James Schaffer of transporting obscene materials for sale.

The Ninth Circuit held that a national community standard “must be applied in regulating obscene speech on the Internet, including obscenity disseminated via email.” United States v. Kilbride, No. 07-10528 at 14492 (9th Cir. Oct. 28, 2009).  Defendant Internet spammers Kilbride and Schaffer had appealed their convictions for interstate transportation for sale of obscene material in violation of 18 U.S.C. §§ 1462 and 1465. Judge Fletcher of the 9th Circuit examined the opinions of the fragmented Justices in the Supreme Court’s opinion in Ashcroft v. ACLU for guidance in reaching his conclusion that a national community standard would not pose the constitutional concerns that a local community standard would. Ashcroft v. ACLU, 535 U.S. 564 (2002)

Eric Goldman provides an overview of the case. Orin Kerr, of The Volokh Conspiracy, criticizes the Ninth Circuit’s reasoning in the case. Kerr argues that the Ninth Circuit should have followed the precedent set in Miller v. California, 413 U.S. 15 (1973), wherein local “contemporary community standards” were applied. (more…)

Class action claim against Zicam manufacturer Matrixx reinstated by the Ninth Circuit

By Abby Lauer – Edited by Alissa Del Riego
Siracusano v. Matrixx Initiatives, Inc., No. 06-15677 (9th Cir. Oct. 28, 2009)
Opinion

The Ninth Circuit has unanimously reversed the U.S. District Court for the District of Arizona’s holding, which had dismissed a class action claim against Zicam manufacturer Matrixx for the complaint’s failure to adequately allege a violation of the Private Securities Litigation Reform Act of 1995 (“PSLRA”).

In an opinion written by Tashima, J., the Ninth Circuit held that the District Court improperly relied on a statistical significance standard to determine that the plaintiffs’ complaint did not allege “a material misrepresentation or omission of fact.” Siracusano v. Matrixx Initiative, Inc., No. 06-15677 at 18 (9th Cir. Oct. 28, 2009). Instead of determining materiality as a matter of law, the district court should have allowed the jury to conduct a “fact-specific inquiry.” Siracusano v. Matrixx Initiative, Inc., No. 06-15677 at 20 (9th Cir. Oct. 28, 2009). In addition, the Ninth Circuit held that the lower court erred in dismissing plaintiffs’ complaint for failure to allege scienter on the part of Matrixx executives. The court reasoned that the inference that Matrixx executives knew about the possible link between Zicam and anosmia (loss of smell) before issuing allegedly misleading statements is at least as likely as any plausible opposing inference.

Phoenix’s East Valley Tribune provides an overview of the case. For further discussion of the opinion and pleading standard precedents, see The D & O Diary. For more information about homeopathic remedies, including Zicam, see this recent Washington Post article. (more…)

By Tyler Lacey

Gamer Appeals Ban from Sony’s Playstation 3 Network

On September 22, 2009, the United States District Court for the Northern District of California dismissed Erik Estavillo’s lawsuit against Sony. Fox40.com reports that Estavillo was banned from Sony’s Playstation 3 Network after allegedly uttering “racial and homophobic slurs to other online gamers.” Estavillo alleged that his freedom of expression was abridged, and likened Sony’s network to a company town. The district court dismissed Estavillo’s First Amendment claims, stating: “Sony’s Network is not similar to a company town. The Network does not serve a substantial portion of a municipality’s functions, but rather serves solely as a forum for people to interact subject to specific contractual terms.” Estavillo recently appealed the dismissal to the Ninth Circuit and has also filed a second lawsuit against Sony.

German Government Pledges to Protect Online Journalism in Germany with a “New Kind of Copyright”

On October 29, 2009, the New York Times reported that Germany’s governing coalition “has pledged to create a new kind of copyright to protect online journalism” with the goal of “level[ing] the playing field with Internet companies like Google.” German publishers fear that Google may be “exploiting their content to build lucrative businesses without sharing the rewards.” Google aggregates news from many news outlets on its Google News website; however, Google News operates in Europe without collecting any advertising revenue. Although “[d]etails of how the proposal would work have not been spelled out,” analysts believes that the new copyright scheme may allow online journalists to “claim royalties for the use of their content by Google or other online ‘aggregators’ of news.” In support of the new scheme, counsel for the German Newspaper Publishers Association argues that there is “no fundamental right to information for free on the Internet.”

United Kingdom to Crack Down on Online Piracy; Could Lead to Outright Disconnection of Pirates

On October 28, 2009, the BBC reported on new legislation that will come into force in the United Kingdom in April 2010. Although “the details of it would need to be hammered out at European level,” the legislation will impose bandwidth restriction on suspected pirates. If necessary, more restrictions will be introduced in the spring of 2011 that could completely disconnect the suspected pirates from the Internet. The legislation already faces challenge from ISP TalkTalk, which has created a “Don’t Disconnect Us” campaign and threatened litigation. Although the legislation is designed to protect the United Kingdom’s creative content industries, legislators emphasize that the long-term solution is for “the industry to educate users and to offer new and cheaper ways to download content.”

By Jyoti Uppuluri

Nokia Sues Apple for Patent Infringement Related to iPhone

On October 22, Nokia filed a suit against Apple in Delaware federal court, alleging that the iPhone infringes patents held by Nokia. The New York Times reports that the specific patents deal with the GSM and UMTS wireless standards utilized by the iPhone for voice and data communication, both of which were developed in part by Nokia. The Wall Street Journal notes that the suit might be a strategic response to the iPhone’s increasing momentum in Europe and Asia. Nokia could gain a two-percent royalty on each iPhone sold if the suit succeeds.

Tennessee Couple Is Entitled to Unmask Anonymous Blogger

On October 8, a Tennessee state court held in Swartz v. Does that a couple is entitled to know the identity of the individual who posted critical statements about them in an online blog. Ars Technica notes that the blogger’s claim to protection under Section 230 of the Communications Decency Act likely failed because the blog induced readers to spy on the Swartzes and report back on the blog. The Citizen Media Law Project points out that the legal standard used by the judge in this case was “highly protective of anonymous online speech,” but that the Swartzes provided “sufficient evidence in support of their claims of wrongdoing to outweigh the anonymous blogger’s right to anonymity.”