Traverse Internet Law on Damages

Traverse Internet Law is an internet lawyer firm specializing in the law of the web. While many online legal commentators and online “internet lawyers” and “professors” are either biased, have an agenda to pursue, or simply do not understand the technical and business aspects of the web.  The firm represents both sides of disputes and at Traverse Internet Law we are often testing the arguments on both sides. This blog is about damages…damages that could flow from liability resulting from online activities. We give the same advice and guidance to plaintiffs and defendants. At Traverse Internet Law our focus is on balancing the competing and complex issues of doing business online.

 

Traverse Internet Law: $675,000 Copyright Infringement Judgment

Traverse Internet Law continues to monitor the Courts for decisions and judgments of legal import. A federal jury on Friday returned a judgment in favor of the Recording Industry Assocation of America against a Boston University graduate student for $675,000 for copying 30 songs. This is the second big judgment entered recently against copyright infringers of music online. Charles Neeson, lawyer for the defendant, had asked the jury to return a minimal judgment and send a message out to the music industry to stop pursuing these types of cases. The jury did not agree, and at Traverse Internet Law we continue to believe that the best approach when caught with infringing materials is to consider negotiating a resolution rather than risking both financial ruin (the defendant is threatening bankruptcy) and, just as importantly, reputational devastation from all the attendant publicity.

 

Traverse Internet Law: $370 Million Defamation Judgment

Traverse Internet Law‘s John W Dozier Jr, author of Google Bomb , a book about online defamation on your bookstore shelves September 1, 2009, reports that five former employees of a Guess Jeans founder have been awarded $370 Million by a Los Angeles jury for defamation related to comments contained in emails and other communications sent by the defendant, Georges Marciano. Mr. Marciano is currently running for California governor. Traverse  Internet Law will continue to monitor developments.

 

Traverse Internet Law on $1.8 Million Defamation Judgment

Traverse Internet Law reports that a South Carolina state court has awarded Scott Brandon $1.8 million in damages for defamation arising out of statements published on a Myrtle Beach based blog. Brandon, who is the head of an ad agency, sued in 2008 claiming that Wizeman was the author of Myrtle Beach Insider and that Wizeman had defamed him by publishing a June 2007 post calling him a “failed lawyer” and criticizing one of his ad agency’s campaigns. Traverse Internet Law reports on significant online defamation cases that lead to monetary judgments.

The $1.8 million award came after Circuit Court Judge Diane S. Goodstein assigned a “special referee” to determine damages and the court official, acting in place of the Judge, recommended an award to Brandon of $800,000 in compensatory damages and $1,000,000 in punitive damages.

Traverse Internet Law continues to see judgments in excess of $1 Million for online defamation and Mr. Dozier’s upcoming release date for the “Google Bomb” book detailing this incredibly complex area of law is set for release September 1, 2009.

 

Traverse Internet Law: $12.5 Million Defamation Judgment

Traverse Internet Law reported on its main blog portal that a federal jury in Texas has returned a $12.5 Million Judgment against conspirators involved in launching a “sucks site” against ORIX Capital Markets. The award was for $2.5 Million in compensatory damages and $10 Million in punitive damages.

Traverse Internet Law is a big proponent of using the conspiracy laws to hold all participating in mobosphere attacks responsible legally.

 

Traverse Internet Law on $1.13 Million Web Development Judgment

Traverse Internet Law runs into many web developer/client disputes. Oftentimes the problems are governed by the terms of the contract in place. However, Virginia has passed Uniform Computer Information Transactions Act (UCITA), which requires web designers and developers to design, build and deliver a project “in accordance with industry standards and practices.”

A Virginia jury recently award $1,138,500 to Blue Line Media, Inc. against its web developer, Redmon Group, for violating this standard of care. At Traverse Internet Law we regularly counsel clients on how to establish appropriate performance standards and measurement benchmarks with an eye towards preventing a project failure.

 

Traverse Internet Law: $33.15 Million Judgment for Verizon

Traverse Internet Law reports that a federal court in Northern California has awarded Verizon $50,000 per confusingly similar domain name registered by OnlineNIC, a registrar and the owner of the names. All 663 domain names sued upon were alleged to either be close misspellings of the Verizon name or contain the name itself. Verizon is part of a not for profit coaltion fonded last year that fights cybersquatting.

At Traverse Internet Law this case is helpful for those who push the envelope with domain name ownership. At $50,000 per domain name, which the Judge found to be a reasonable award, the practice of cybersquatting as a business strategy can get pretty costly.

 

Traverse Internet Law: Lawyer Wins Defamation Lawsuit

Traverse Internet Law reports today that a self styled “free speech advocate” has been ordered to pay a Court judgment of $30,000, and the Ontario Court of Appeal added another $10,000 in legal costs in a decision confirming the award. The defendant had earlier reported that the Appeal Court judges were “snapping and confrontational” during his hearing earlier in the week. At trial, the Judge described the defendant’s defamatory attacks against the lawyer as a “steady diet of diatribe and insults, couched in half-truths and omissions…” and rejected a free speech and fair comment defense. The defendant posted on his “free speech” website that he is $17,500 behind in legal bills, and he is trying to raise money to pay his bills, the judgment, and/or appeal again to the Supreme Court. At Traverse Internet Law we are seeing a pronounced trend among the Courts to view claims of “free speech” with increasing skepticism in an apparent response to the realities of the impact of the veritable tidal wave of false and damaging online personal and business attacks.

 

Traverse Internet Law on $700,000 Microsoft Judgment

At Traverse Internet Law we have defended many cases Microsoft has filed over the years. Usually they are settled and Microsoft is reasonable in the process. You generally cannot look to the amount of a judgment to really know what the settlement was since often there is a private settlement far lower in terms of dollars in the agreement. The judgment is entered and can be used by Microsoft to collect if the settlement agreement is violated by the Defendant.

In this case, the amount of judgment was $700,000 and not only did Microsoft rely upon the judgment terms to try and collect, but a criminal charge for contempt of court was brought when Carmelo Cerrelli allegedly continued to sell unlicensed copies of Microsoft software. Traverse Internet Law rarely sees things go this far in post judgment remedies. The Judge found him in criminal contempt of court and fined him an additional $100,000.

 

Traverse Internet Law: $236 Million Judgment

Traverse Internet Law reports regularly on lawsuits and judgments being entered around the country. And the size of judgments keeps getting bigger and bigger. An Iowa federal judge recently entered a judgment after trial for $236 Million against an alleged spammer, including individual owners. And Facebook just took a judgment for $873 Million against an individual who was misusing its networking services.

Both judgments were taken against individual defendants. At Traverse Internet Law we find that many small businesses believe that if they incorporate their business then only the corporation is liable. This is rarely true. For instance, individuals and managers are often liable personally for trademark infringement, copyright infringement, and a host of other violations. And corporation entities are relatively easy to pierce to get to the individual owners given the informal operations of most small online businesses today. Dozier Internet Law suggests that you not assume that a corporation is much protection at all.

 

Traverse Internet Law on Collecting Judgments

Recovering Damages From Thieves, Crooks and Scofflaws

It seems not a day passes that Traverse Internet Law is not asked how to pursue someone who is using a replica website to “compete”, is stealing traffic through trademark infringement, is publishing outrageously false information online, or is undertaking sinister, threatening conduct against a business or its owners. “You can’t get water from a rock” is often a self-serving declaration offered by the crooks when caught. At Traverse Internet Law we have come to appreciate the fact that with some hard digging sometimes there are pockets from which to collect a significant damages award. And the good news is that there are very powerful legal tools to work with that, if understood, can be used to recover a judgment.

First, let’s acknowledge that getting a huge monetary judgment against someone personally is often meaningless unless it can be collected. With very limited space, let me tell you how you can get your money from a judgment:

1) For a Federal Court judgment, you can execute and serve post judgment actions anywhere in the US. For a state court judgment, you can “execute” on a judgment after using a very easy process to register an out of state judgment in the state in which you need to proceed. The defendant’s location may be irrelevent to your ability to collect, particularly when e-commerce is occurring and money is owed to the defendant from third parties like payment processors, Google, and others.
2) Garnishment is the most often used process, and means that 25% of the defendant’s wages as an employee, and 100% of sums owed as a contractor or from any other company, are taken and paid directly to you through the court. This includes bank accounts also, and some retirement accounts. And Paypal account and Adsense account balances also! You can issue many at the same time, and do them again and again until paid.
3) Attachments are used to seize property. If the defendant owns a car, the vehicle can be seized, sold, and the proceeds after paying off the note and expenses are paid to you. It is often used to seize personal property, and can include rings and watches, household items, other personalty, and even domain names and web sites.
4) Judgment liens are placed on real estate records and property owned by the defendant, unless owned as husband and wife in its entirety, and the property cannot be sold without paying you the proceeds. Or, you can file a lien and then file a lawsuit to force the sale of the house if you don’t want to wait.
5) Debtor’s Interrogatories are used when you don’t know what the defendant (“judgment debtor”) owns. You can serve a summons on the defendant every six months and your lawyer will interrogate the defendant under penalty of perjury. If the defendant fails to show it can lead to the defendant being held in jail until the next hearing date, often a month away. This is as close as we get in the US to “debtor’s prison”!

Obviously this is a succinct list of tools that, together with applicable statutory exemptions, vary by state. But you work with the tools you have. Envision yourself in the judgment debtor’s shoes…never knowing when the sheriff will knock on his door to inventory his household effects, never knowing when the money he is owed by a business will disappear into your coffers, never knowing when he will be required to come in and be interrogated, and never knowing when his car will be pulled over and seized. Yes, you do work with the tools you have…and on a rock, you may want to try a chisel.

So whether you are someone faced with a potential claim, or someone trying to decide how to pursue a scofflaw, understand that this is the mindset a high quality, motivated lawyer will have in pursuing the recovery of a judgment. Mr. Dozier was a founder, Vice President, and National Legislative Chairman of the National Association of Retail Collection Attorneys, a trade group of almost 1,000 law firms dedicated to collecting debts. There are plenty of law firms ready, willing and able to make life very difficult for a judgment debtor. It’s not a place you will ever want to be.