From Tasini To The Winklevi: Greed, Retroactively Breaking Deals And Feeling Entitled To What's Not Yours
from the sad dept
Jack Shafer at Slate does a nice job tying together the common thread in two recent stories: the Winklevoss twins losing in their attempt to back out of a previous settlement with Facebook and arguing that they are owed much more than the $170 million they've received despite their lack of work on Facebook itself... and Jonathan Tasini's almost universally mocked lawsuit against the Huffington Post for not paying him for articles he agreed to write for free (yes, you read that right). In both cases, these are situations where those who didn't actually build successful businesses totally overvalue some potentially tiny contribution they might have made, see that someone else did succeed and did make a ton of money... and they go back on a previous deal to demand more money they don't deserve:What's Winklevossian about Tasini's suit is his timing. Just as the twins were happy with their settlement until they realized that the money pot had grown, Tasini helped himself to the HuffPo platform, no questions asked, until he saw a Brinks truck arrive with the AOL cash.Elsewhere, Shafer notes that "we're becoming a nation of Winklevosses who file legal motion after legal motion every time a pot of money is spotted." Becoming? I'd argue that's been happening for quite some time. Over the years we've covered how nearly every super successful book or movie has someone jump out of the woodwork to claim that the idea was "copied."
Unpacking this deeper, I'd argue there are two key issues here. First, is that many people significantly overvalue an idea or a bit of content, assuming that it's worth much more than the structure or process around it. And, second, we've built a legal system in which all too often it pays for losers to litigate against those who succeed. There's a sense of entitlement that people feel towards anyone who succeeds, and people simply fail to recognize that they would never react the same way in the other direction. As I've pointed out before, if the writers, like Tasini, who are complaining or suing had received (for example) a job assignment due to their work on the Huffington Post, would they have given Arianna a cut of their earnings?
Unfortunately, our legal system often makes this kind of situation rewarding for the people who sue. It's often cheaper to settle such cases rather than let them go on, and that can be quite damaging to those who succeed. The basis of free market competition and innovation is that you reward the successes, not the failures. But all too often, our legal system is allowing the latter to happen.
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Filed Under: entitlement, greed, tasini, winklevoss
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One brilliant idea doesn't guarantee a brilliant execution. But a brilliant execution makes the original idea look brilliant.
What I mean to say is: having an good idea alone is meaningless. It's the execution that counts, and that's what makes the idea look brilliant.
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That goes for all "entitlements"
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And you are complaining why? Your main "argument" seems to be that they can lower that "bar" again, but if they removed the tax altogether it would never ever come back again?
Is it REALLY that much harder to add a new tax than to change one?
And 55%? Wow, we should all be so lucky. Last number I heard about here in Sweden was closer to 75%.
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Re: That goes for all "entitlements"
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It is easier to compete in the courts rather than the market
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Flipside that for a second: if you were The Little Guy and someone rides-a-helicopter-to-work famous made a book/movie/whatever that was similar enough to yours: could you publish afterwards without getting sued by the publisher? Even if it's not a copy, even if they didn't steal it, even if the little guy can take the idea and execute it in a new and novel way, how many industries out there have legacy players who wouldn't sue the upstart?
IANAL so I don't know how much different the filing costs are for a declaration of summary judgement vs. that of a plain old lawsuit, but if the projected costs of the two are similar, why not go shoot for the moon?
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I agree with you - while Mike is right that litigation in the US has become stupid and encourages frivolous lawsuits because they may get rewarded regardless of merit, the problem in the particular example he gives is not that the little guy is sue-happy, but rather that the underlying substantive law of copyright is ridiculous. Put differently, that lawsuit is not frivolous because the law is broken.
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That does seem to be the crux of the issue. I can only wonder how our legal system could put a damper on opportunism, while letting legitimate civil complaints though in an efficient way? Consider me stumped.
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Very simple to fix.
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Very simple to fix.
This is how many other nations handle this.
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Re: Very simple to fix.
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Re: Very simple to fix.
First, impecunious plaintiffs (and defendants) will not be made to pay because you cannot bleed a stone. So fee-shifting rules do not discourage the very poor from filing.
Second, filthy-stinking rich plaintiffs (and defendants) do not care that they will be made to pay, because they typically value that amount of money less than they value winning the lawsuit (either because the suit is inevitably worth more, or because the outcome of the suit will effect their ability to operate in the manner they like). If you sue Disney for simple copyright infringement of a single work and fight it tooth and nail, you will likely spend around $2mm or less, potentially substantially less. The potential verdict could be two or more orders of magnitude higher. The value to Disney of grinding you down or winning outright is well worth the risk of having to pay $2mm. Likewise the other direction - if Disney can protect a $1b property by suing an upstart and spending a ton of money, it is well worth the risk of having to pay The Little Guy's paltry legal bill. Attorney fee awards do little to discourage frivolous lawsuits by the very wealthy.
Take those two together, and you have a relatively small sector of the economy that is actually affected by fee-shifts (at least in terms of their willingness to file frivolous actions). Where it has a much bigger effect is in determining the value of a settlement. And there, it has a _very_ big effect.
Of course, fee shifting has other effects (all positive, in my view). Most importantly, they make the person who turned out to have been wrong bear the expense of litigation, if they have the ability to do so. In my opinion, the fee-shifting provisions should be expanded so that litigants must post a bond sufficient to cover the other side's anticipated reasonable legal bills in order appear. In addition, defendants who are successful in a case should be awarded some portion, say 20%, of the damages claimed by the plaintiff in the complaint, and plaintiffs should be limited to an award no larger than what appears in their complaint. Such a bonding requirement would virtually eliminate frivolous lawsuits except by the very wealthy, but should not deter cases that appear strong because plaintiff's lawyers and litigation bonding companies should be willing to put up bond for such cases. The requirement would only pinch the tough cases in the middle that look 50/50.
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Actually it would mean that anybody poor could have their ideas stolen with impunity, because they would not be able to afford to lose.
Truly frivilous lawsuits are one thing. Simply losing the case is different.
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I think Tasini owes arianna his entrails. How kind she was to let him work for free. Where would we be without these wealthy superbeings who bring such value to our lives?
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If "Winklevoss" is now synonymous with "greedy entitled prick" in our national lexicon, I approve.
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HuffPost
Peter Friedman considers there is no case for unjust enrichment, but that's not what this case is actually about. The claim is for deceptive business practices under NY State law. Plaintiffs argue that HuffPost lied to them about the exposure (which kept on decreasing as more writers were hired) and the "free" nature of the website.
"Free" is an important word in consumer law, since a business cannot advertise something as "free" and then demand payment for it. While HuffPost asked for articles, they also asked for publicity through social networking groups. Thus, they actually required payment (user lists) for something they had advertised as free.
The "creativity" of the lawsuit lies in its use of consumer protection laws to protect writers from online websites that offer "payment" and then refuse to deliver. Plaintiff alleges that HuffPost solicited his assistance (not just his articles) to help build a "free" website and then turned the website into a business venture that benefitted only the owners. Under consumer law, this could be considered a "bait and switch" marketing tactic, which is also illegal under New York Law. New York law also permits consumers to sue businesses who have violated this law.
Any contract the writers may have with HuffPost cannot be enforced if it was secured by deceptive business practices (malum prohitibum). Once the court rules that there was a deception practiced by the business, the unjust enrichment charge does not need to be proven, contrary to what Friedman alleges. Any enrichment gained by deception is unlawful per se.
Anyone who continues to write for AOL on the same terms is an idiot, of course.
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