Twenty-one States Inadvertently Tell The DC Circuit That The Plaintiffs Challenging FOSTA Have A Case

from the with-amici-like-these dept

The constitutional challenge to FOSTA chugs on. A few weeks ago the DOJ filed its opposition brief to defend FOSTA, and then last week several amicus briefs were filed intending to support the government's side. But in reading the one filed by twenty-one state attorneys general, it seems that's not what it did.

The important thing to remember about this appeal is that the question before the appeals court isn't really about the constitutionality of FOSTA itself. What's being appealed is the case having been dismissed for lack of standing by the plaintiffs. The district court never directly ruled on the constitutionality of the law; it only ruled that these plaintiffs had no right to complain about it to the courts. According to the district court these plaintiffs weren't being hurt, or likely to be hurt, by FOSTA, and so it dismissed their case. What the parties are fighting about now is whether this assessment by the district court was right.

For the plaintiffs it makes sense to keep pressing the constitutional issue because shining a light on the unconstitutionality of the law illuminates the injury the unconstitutionality has already caused and will continue to cause. But the defense has a different and much simpler job. All the DOJ has to do to defend FOSTA is say is, "The district court was right. These people were not hurt by FOSTA and will not be hurt by FOSTA, so keep this case dismissed." If the appeals court agrees that there has been no injury, and that there is unlikely to be any injury, then the case remains dismissed and this constitutional challenge goes away.

And so that's what the DOJ's brief basically does: parrot the district court's decision that there is nothing to see here. The DOJ spent its pages arguing that there has been no injury, nor is there the likelihood of any injury, because FOSTA could not possibly empower prosecutors to reach the plaintiffs.

As the district court correctly concluded, plaintiffs’ conduct is not “proscribed by [the] statute,” and plaintiffs face no “credible threat of prosecution thereunder.” [DOJ brief p. 10]

It's an unfortunate position for the government to take, but it's not an irrational litigation strategy. The only thing the DOJ needs to do here is assure the court that the plaintiffs have nothing to worry about.

But that's exactly what the amicus brief by the twenty-one state attorney generals does not do. Although it is intended to support the DOJ's defense of the statute, rather than supporting the DOJ's argument that the plaintiffs' complaints are much ado about nothing, their brief instead reads as a bright flashing neon sign warning the court that there is plenty of reason for them to be worried. Because, in contrast to the DOJ's arguments about what FOSTA does not do, this brief reads as a paean to everything FOSTA is going to let the states do, including to people just like the plaintiffs.

First, it reminds the court just how much FOSTA empowers states like them.

FOSTA makes explicit that: (1) federal law no longer can be said to provide legal protection for websites that unlawfully facilitate sex trafficking; and (2) States may now pursue state-law prosecutions based on conduct that would also violate FOSTA. 47 U.S.C. § 230(e)(5). [I]f a State criminalizes the same conduct FOSTA criminalizes, the State need not wait for the Department of Justice to prosecute traffickers operating in the State; the State’s prosecutors may do so themselves. FOSTA also authorizes a state attorney general, on behalf of the residents of his or her State, to initiate civil actions against those who violate 18 U.S.C. § 1591 (“Sex trafficking of children or by force, fraud, or coercion”) if there is “reason to believe” that an interest of the State’s residents has been or is threatened or adversely affected by the violators. [state AG brief p. 9-10]

It also tells the court just how keen they are to be so empowered. Although the brief is only 10 pages, more than five of them are devoted to a gushing inventory of all these states' policy agendas against sex trafficking. [state AG brief p. 3-9]

It further implies that the only reason there have not been more prosecutions predicated on FOSTA to date is because the states first need to pass some laws to enable these prosecutions, and that takes some time.

Bills to accomplish this are currently pending before the Texas Legislature. Tex. H.B. 15, 86th Leg., R.S. (2019) and Tex. S.B. 20, 86th Leg., R.S. (2019). [state AG brief fn. 3]

In other words, this brief undermines all the arguments that the unconstitutional effects of FOSTA are hypothetical by instead essentially pointing out to the court that they just haven't accrued yet. FOSTA empowers states to act, they are keen to act, and they just need a little more time until they will be able to act.

Which perhaps wouldn't be so much of a problem if states were carefully focused on actual instances of sex trafficking. But the amici themselves are proof that such restraint is unlikely.

In particular, note that one of the states on the brief is Florida. Now think back to just a few months ago when Florida prosecutors stole attention away from the Super Bowl with their announcement that they had broken up a "sex trafficking" operation in Palm Beach… which then turned out not to be a sex-trafficking operation after all.

It was sex work prosecutors had discovered, sure, but at least three of the plaintiffs challenging FOSTA are advocates for sex workers, in no small part because they believe that advocating for sex workers helps keep them safe and out of the clutches of sex traffickers. They sued because they are worried about how the vague language of FOSTA can be used against their advocacy.

A big part of the DOJ's argument is that no one could possibly misconstrue their speech on sex work with the speech relating to sex trafficking and end up using FOSTA to target them.

[Plaintiffs'] activity is wholly outside of FOSTA’s ambit. It is not proscribed by § 2421A, which prohibits owning, managing, or operating an interactive computer service with the intent to promote or facilitate specific instances of illegal prostitution. Nor is it prohibited by § 1591, the pre-existing federal criminal prohibition on sex trafficking. And because FOSTA amended Section 230 immunity only to permit civil claims under § 1595 “if the conduct underlying the claim constitutes a violation of section 1591,” and State criminal prosecutions “if the conduct underlying the charge would constitute a violation of section 1591” or § 2421A, see 47 U.S.C. § 230(e)(5), plaintiffs do not face a reasonable fear of prosecution as a result of those amendments, either. [DOJ brief p. 15-16]

Yet here before the court is an amicus who not long ago got sex work and sex trafficking very badly mixed up. And here it is announcing to the court how excited it is that FOSTA has given them the power to get them mixed up in a way that will affect even more people, including those situated exactly like the plaintiffs.

The DOJ wants the court to believe that any injury the plaintiffs complain about is entirely speculative.

To the extent plaintiffs are concerned that a State or private litigant might attempt to bring a lawsuit against them in the future notwithstanding the text of FOSTA, that concern cannot provide plaintiffs with standing to sue the federal government here. […T]hat fear is entirely conjectural, and “require[s] guesswork as to how independent decisionmakers will exercise their judgment.” [DOJ brief p. 29-30]

But thanks to amici, we know exactly how these independent decision makers will exercise their judgment: badly. Thus, despite the DOJ's best efforts to convince the court of the plaintiffs' lack of standing, the state AG's amicus brief has done the exact opposite.

In a way the amicus brief is just like FOSTA itself: not understanding the job that needed to be done but rushing in with legal guns blazing anyway. And just like FOSTA, this ill-tailored legal response has caused all sorts of collateral damage that just makes the problem to be solved worse.

Filed Under: cda 230, fosta, section 230, standing, state attorneys general

John Oliver Exposes The Sketchiness Of Political Grandstanding State Attorneys General

from the it's-even-worse-than-he-says dept

Once again, it appears that comedian John Oliver is doing much more to dig into actual political problems than much of the rest of the news. The latest was his show this past Sunday about the weird and wacky world of state Attorneys' General. If you haven't seen it yet, it's worth a watch:

Oliver's piece focuses on state AGs (of both parties) filing partisan lawsuits against the federal government (of the opposing party). But the real "scandal" is in how various corporations have recognized the power of state AGs to effectively create policy (mainly by causing trouble for competitors). We've discussed this aspect multiple times in the past, mainly around Mississippi's Attorney General Jim Hood going after Google at the request of the MPAA. And, of course, it wasn't just "at their behest," it was literally Hood more or less rubber stamping a demand letter written by the MPAA's lawyers and sending it on as his own. The emails from the Sony hack revealed that the plan was literally to have the MPAA lawyers do all the investigative work and prepare many of the documents, and hand them off to "friendly" state AGs to shake down and threaten companies such as Google.

And they didn't come up with this idea out of nowhere. It came in response to a 2014 NY Times article detailing how corporate lobbyists were "pursuing" state AGs directly in plans to cause trouble for competitors (or to get themselves out of investigations).

Attorneys general are now the object of aggressive pursuit by lobbyists and lawyers who use campaign contributions, personal appeals at lavish corporate-sponsored conferences and other means to push them to drop investigations, change policies, negotiate favorable settlements or pressure federal regulators, an investigation by The New York Times has found.

A robust industry of lobbyists and lawyers has blossomed as attorneys general have joined to conduct multistate investigations and pushed into areas as diverse as securities fraud and Internet crimes.

But unlike the lobbying rules covering other elected officials, there are few revolving-door restrictions or disclosure requirements governing state attorneys general, who serve as “the people’s lawyers” by protecting consumers and individual citizens.

Most normal people would look at this and see the horrors of soft corruption. The MPAA looked at this and appeared to think, "hey, we should get in on that." (I'll leave aside the irony of the strict copyright maximalist MPAA sending around an entire copy of a NY Times article with no commentary to all the top staff at the MPAA and all the top legal folks at its member studios...) That resulted in them crafting a big plan to "fund" significant amounts of cash directly for doing the dirty work for state AGs to target Google.

And, of course, it gets even worse than that. Years back, we wrote about Chris Tolles' harrowing tale in which a long list of state AGs effectively tried to shake down his startup, despite everyone admitting it had not broken any laws. The whole story is worth reading, but perhaps the most incredible part is after Tolles spoke with the state AGs, openly provided all the details on how his site operated, and why it was clearly within the law... they then went after him in the court of public opinion by misrepresenting everything he said (but never actually going after him in court):

So, after opening the kimono and giving these guys a whole lot of info on how we ran things, how big we were and that we dedicated 20% of our staff on these issues, what was the response. (You could probably see this one coming.)

That's right. Another press release. This time from 23 states' Attorney's General.

This pile-on took much of what we had told them, and turned it against us. We had mentioned that we required three separate people to flag something before we would take action (mainly to prevent individuals from easily spiking things that they didn't like). That was called out as a particular sin to be cleansed from our site. They also asked us to drop the priority review program in its entirety, drop the time it takes us to review posts from 7 days to 3 and "immediately revamp our AI technology to block more violative posts" amongst other things.

That was hardly the only example. Over the years, we've regularly detailed state AGs (of both parties) specifically picking on tech and internet companies with bogus legal threats, but which easily made lots of headlines, and helped get their names and faces in the paper. A lawyer friend has joked that, NAAG, the National Association of Attorneys General, it really stands for the National Association of Aspiring Governors. That's because many, many, many state AGs end up seeking higher office -- either as governor or US Senator. So getting their names in the news, even for bullshit reasons, is seen as valuable for name recognition.

Oliver's point in all of this is that with many state AGs up for election next week, you should take the time to understand who is really running. And this is not a partisan message. We've covered awful state AG practices from members of both parties (and, occasionally, good state AG actions from members of both parties). But who is in that role really does matter, and it's time we really started paying attention to who we're putting in those powerful positions.

Filed Under: grandstanding, john oliver, shakedowns, state ags, state attorneys general

34 State AGs Demand The FCC Do More To End Annoying Robocalls

from the sorry-I-was-eating-dinner dept

Despite endless government initiatives and countless promises from the telecom sector, our national robocall hell continues. Robocalls from telemarketers continue to be the subject the FCC receives the most complaints about, and recent data from the Robocall Index indicates that the problem is only getting worse. Consumers continue to be hammered by mortgage interest rate scams, credit card scams, student loan scams, business loan scams, and IRS scams. In September, the group found that 4.4 billion robocalls were placed to consumers at a rate of 147 million per day. The trend is not particularly subtle:

The trend continues skyward despite the fact that the FCC passed new rules in 2015 expanding the ability of telecommunication companies to block robocalls and spam messages at the request of customers. And in 2016, the agency created a "robocalling strike force" tasked with crafting solutions for the problem. Additional rules dropped in 2017 taking aim at robocall spoofing.

So why is this still a problem? For one thing, cheap, internet-routed calling and spoofing options have outpaced both legal and technical solutions, leaving regulators and lawmakers in a perpetual race to catch up from behind. Flimsy security standards embedded in most caller ID systems also make spoofing phone numbers relatively trivial. Enforcement is also inconsistent (in part because smaller robocallers are often much easier to defeat in court than major companies), and years of apathy, blame shifting, and tap dancing by major carriers like AT&T certainly didn't help.

To that end, 34 State attorneys general signed a formal request this week urging the FCC to do more to thwart the problem. Comments made to the FCC make it clear that the FCC's 2017 spoofing rules didn't go far enough, so the AGs are requesting that the FCC create additional, more tailored rules to tackle things like "neighbor spoofing":

"One specific method which has evolved recently is a form of illegal spoofing called ‘neighbor spoofing.’ A neighbor-spoofed call will commonly appear on a consumer’s caller ID with the same area code and local exchange as the consumer to increase the likelihood he/she will answer the call. In addition, consumers have recently reported receiving calls where their own phone numbers appeared on their caller ID. A consumer who answered one such call reported the caller attempted to trick her by saying he was with the phone company and required personal information to verify the account, claiming it had been hacked. Scams like this cannot be tolerated."

The AGs also encouraged the FCC to bring some additional pressure on carriers to speed up the deployment of STIR (Secure Telephone Identity Revisited) and SHAKEN (Secure Handling of Asserted information using toKENs), protocol frameworks that should make it notably easier to authenticate legitimate calls and identify illegally spoofed calls. Hopefully the FCC can take a brief break from ignoring the public and kissing up to widely despised telecom monopolies to consider the request.

Filed Under: fcc, robocalls, scams, state attorneys general

DOJ And State Attorneys General Threatening Social Media Companies Over Moderation Practices Is A First Amendment Issue

from the that's-not-how-any-of-this-works dept

Earlier this month, President Trump made it explicitly clear that he expects the Jeff Sessions' DOJ to use its power for political purposes, protecting his friends and going after his enemies:

And, while the DOJ hasn't done that concerning indictments of Trump's friends and cronies, it appears that Sessions may be moving towards it with another "enemy" in the mind of Trump. Over the last few weeks Trump has also made it clear that he (incorrectly) believes that the big internet companies are deliberately targeting conservatives, and has threatened to do something about it.

On Wednesday, just after Twitter and Facebook appeared before Congress, the DOJ released a statement saying that it was investigating whether or not actions by the big internet companies was "intentionally stifling the free exchange of ideas." The full statement was short and to the point:

We listened to today's Senate Select Committee on Intelligence hearing on Foreign Influence Operations' Use of Social Media Platforms closely. The Attorney General has convened a meeting with a number of state attorneys general this month to discuss a growing concern that these companies may be hurting competition and intentionally stifling the free exchange of ideas on their platforms.

The competition question is one that the DOJ's antitrust division clearly has authority over, but alarms should be raised about the DOJ or state AGs arguing that these platforms are "stifling the free exchange of ideas on their platforms." Because while -- on its face -- that might sound like it's supporting free speech, it's actually an almost certain First Amendment violation by the DOJ and whatever state AGs are involved.

There are lots and lots of cases on the books about this, but government entities aren't supposed to be in the business of telling private businesses what content they can or cannot host. Cases such as Near v. Minnesota and Bantam Books v. Sullivan have long made it clear that governments can't be in the business of regulating the speech of private organizations -- though those are both about regulations to suppress speech.

But there are related cases on compelled speech. Most famously, perhaps, is West Virginia State Board of Education v. Barnette which said schools' can't make kids say the Pledge of Allegiance. In that case, the court ruled:

If there is any fixed star in our constitutional constellation, it is that no official, high or petty, can prescribe what shall be orthodox in politics, nationalism, religion, or other matters of opinion or force citizens to confess by word or act their faith therein.

Forcing platforms to carry speech would clearly go against that.

Miami Herald v. Tornillo actually seems even more directly on point. It was in response to a Florida state law demanding "equal space" for political candidates, but the court ruled, pretty definitively, that as private publications, the government could not compel them to host speech they did not want to host. The ruling even discussed the issue of a lack of competition -- which Sessions' statement alludes to -- and concludes that's not an excuse for compelling speech. In CBS v. the Democratic National Committee, the Supreme Court clearly noted:

The power of a privately owned newspaper to advance its own political, social, and economic views is bounded by only two factors: first, the acceptance of a sufficient number of readers -- and hence advertisers -- to assure financial success; and, second, the journalistic integrity of its editors and publishers.

In other words, if a private speech hosting platform is too one-sided, that is for the market to decide, not the government.

So, yeah, there are concerns raised here about freedom of expression... but it's by Attorney General Jeff Sessions and whichever State Attorneys General decide to participate in this clown show. Oh, and just to put a little more emphasis on why this is clearly a political move designed to suppress free speech rights? So far only Republican Attorneys General have been invited -- a point I'm sure any court would take note of.

Filed Under: compelled speech, content moderation, first amendment, free speech, jeff sessions, pressure, state attorneys general

Why Does SESTA Allow State Attorneys General To File Civil Claims?

from the please-someone-explain dept

So we've already talked a lot about the problems of the "knowledge" standard in the amended version of SESTA, in that it's way too broad, and leaves smaller sites completely adrift in figuring out if they're on the right side of the law. But there were other changes in the amended version of SESTA as well -- some good, and some bad. Law professor Eric Goldman has an excellent post detailing the changes, but I want to focus on one really perplexing one.

For reasons that are totally unclear, SESTA now allows states Attorneys General to file civil charges against websites for violating sex trafficking laws. That's... weird. One good change in the new SESTA was the removal of letting state AGs go after sites for just violating state trafficking laws by requiring "conduct that violated a Federal criminal" trafficking law. That was important, because state laws are a hodgepodge of rules, and can change (often in weird ways) making it next to impossible for many websites to make sure they're magically in compliance with every state's laws on this issue. But perhaps to keep the state AGs happy, this was added instead:

In any case in which the attorney general of a State has reason to believe that an interest of the residents of that State has been threatened or adversely affected by any person who violates section 1591, the attorney general of the State, as parens patriae, may bring a civil action against such person on behalf of the residents of the State in an appropriate district court of the United States to obtain appropriate relief.

As Goldman notes, this makes no sense at all:

I don’t understand this provision and why it’s needed, given that SESTA separately loosens the constraints on state AG enforcement of their state crimes. The scope of civil enforcement is still tied to the federal crime, which is good, but giving state AGs a second option to enforce the law is puzzling. I know the bill proponents feel like much of the sex trafficking enforcement work is done at the state and local level, so unleashing the state AGs from Section 230 will put more “cops on the beat.” However, why do they also need a civil action to do that work?

This change is significantly more troubling if you're at all familiar with the fairly recent history of state Attorneys General and their grandstanding against technology. We've written about this on Techdirt for the better part of a decade, but I'll point you to two "must read" articles on other sites to get a sense of how trusting state AGs with such a massive power is going to backfire badly. The first is Topix CEO Chris Tolles' horrifying account of having State AGs gang up on his company with no legal basis, just because they didn't like the way Topix dealt with what were deemed "abusive" comments. Notably, one of the state AGs leading the charge: Richard Blumenthal -- then in the middle of a campaign to become Senator for Connecticut (which he won) and now... the co-author of SESTA. Hmm.

From that first hand account:

After my lawyers reconfirmed that we weren’t being accused of breaking any specific laws, I decided to take a pretty open stance with these guys and give them the background on what we did, and how we did it, figuring that if they knew what we were doing, and in particular, if they knew that the paid expedition of reviews was only about 1% of all of our feedback, that we would be able to clear this up pretty easily. (I was wrong about this).

The call with these guys was actually pretty cordial. We walked them through how we ran feedback at Topix, that how in January 2010, we posted 3.6M comments, had our Artificial Intelligence systems remove 390k worth before they were ever even put up, and how we had over 28k feedback emails and 210k user flags, resulting in over 45k posts being removed from the system. When we went through the various issues with them, we ended up coming to what I thought was a set of offers to resolve the issues at hand. The folks on the phone indicated that these were good steps, and that they would circle back with their respective Attorneys’ General and get back to us.

No good deed goes unpunished

So, after opening the kimono and giving these guys a whole lot of info on how we ran things, how big we were and that we dedicated 20% of our staff on these issues, what was the response. (You could probably see this one coming.)

That’s right. Another press release. This time from 23 states’ Attorney’s General.

This pile-on took much of what we had told them, and turned it against us. We had mentioned that we required three separate people to flag something before we would take action (mainly to prevent individuals from easily spiking things that they didn’t like). That was called out as a particular sin to be cleansed from our site. They also asked us to drop the priority review program in its entirety, drop the time it takes us to review posts from 7 days to 3 and “immediately revamp our AI technology to block more violative posts” amongst other things.

I don't want to all stereotype state Attorneys General, but there's a reputation that the state AG position is a stepping stone to higher office -- generally state Governor or Senator. And, thus, there's a fairly long history of state AGs using their platform for regular grandstanding, getting themselves in headlines. And one good way to do that is to pick a hot topic that will create headlines, totally misrepresent it, and then jump in front of the press. That's what happened to Topix, but we've highlighted numerous other such cases, from Andrew Cuomo (when he was NY's Attorney General, before going on to be Governor) getting ISPs to cut off Usenet access to then South Carolina AG Henry McMaster (then AG, now Governor) threatening to throw Craigslist execs in jail to Pennsylvania's Tom Corbett (then AG, and soon after Governor -- sense a pattern yet?) demanding Twitter reveal anonymous critics to Mississippi Attorney General Jim Hood blaming everything bad on the internet on Google. In each of these cases, with no legal basis, state AGs attack big California tech companies. Because it generates headlines. As Tolles wrote in his piece:

The States’ Attorneys General are the place that complaints about your company will probably end up. This is especially true if you host a social or community based site where people can post things that others may dislike. And, there’s no downside to attacking a company based in California for these guys (MyScape, Facebook, Craigslist have all been targets in the past couple of years). Taking complaints from your citizenry and turning them into political capital is simply too good an opportunity for these guys to pass up.

And SESTA now provides them with a big weapon: a civil lawsuit. Back during the one hearing the Senate held on SESTA, California's AG, Xavier Becerra insisted that there was little chance of SESTA being abused, because he had to prove beyond a reasonable doubt that a site was facilitating sex trafficking. But, in opening up civil claims to state AGs in the new bill, that's no longer true. Now we're talking about a "preponderance of the evidence" which is a much lower standard -- i.e., one that will be much, much easier for state AGs to abuse to shakedown tech companies.

And here's where this gets potentially much, much worse. We've already discussed the problematic nature of the "knowledge" standard directly within SESTA, but this new portion allowing civil cases by state AGs may make the problem drastically worse. Note that the text quoted above, opening up civil claims to state AGs, technically would amend 18 USC 1595 to add that paragraph above. But when you put it into context, you realize that 1595(a) notes that civil actions can be brought against anyone who "knew or should have known" was violating sex trafficking laws. So, suddenly, we're beyond the already problematic "knowledge" standard directly in SESTA, and now opening up civil claims from already aggressive state AGs, who can now argue that the standard is that a site "should have known" about the facilitation of sex trafficking on the site. That is, there's no more "knowledge" requirement at all.

That's... really bad.

And now we get to the second off-site article that's worth reading to understand why this is so problematic. Three years ago, Eric Lipton wrote a bombshell of an article in the NY Times, entitled Lobbyists, Bearing Gifts, Pursue Attorneys General, all about how lobbyists were focusing a tremendous amount of attention on state AGs to do their bidding for them, including attacking companies they don't like.

Attorneys general are now the object of aggressive pursuit by lobbyists and lawyers who use campaign contributions, personal appeals at lavish corporate-sponsored conferences and other means to push them to drop investigations, change policies, negotiate favorable settlements or pressure federal regulators, an investigation by The New York Times has found.

Among the many, many shocking things in that article, is the suggestion that some of the "investigations" by state AGs have something of a "profit" motive, rather than a public interest one:

Executives from the company that distributes 5-Hour Energy, for example, have contributed more than $280,000 through related corporate entities in the last two years to political funds of attorneys general.

Company executives wrote those checks after the investigation into false claims and deceptive marketing, which initially involved 33 states, opened in January 2013. Requests started to come in for contributions, including a phone call this year directly from Mr. Ferguson of Washington State, whose staff was involved in the inquiry.

In a statement after the company was sued by three states in July, the company strongly denied the allegations and compared being solicited for contributions to being pressured to pay “ransom.” It asked, “Is it appropriate for an attorney general to ask for money from a company they plan to sue?”

And, if SESTA passes, these same state AGs will suddenly be able to bring civil suits against companies -- potentially using a "should have known" standard, in which the end result may be a monetary settlement.

That Lipton article lays out example after example after example of companies making big donations to try to influence state AGs, and sometimes doing the legal legwork for them. And if you think this won't be used by certain companies to get state AGs to attack tech companies on their behalf, you haven't been paying attention. Remember, thanks to the Sony Pictures email leak, we know that the MPAA was literally passing around that Lipton article about influencing state AGs, and discussing how they needed to get in on that as part of "Project Goliath" -- their plan to harm Google -- which eventually led to the sketchy subpoena from Mississippi AG Jim Hood. Remember, the letter that Hood sent Google was actually written by the MPAA's outside lawyers.

So, once again, the question needs to be asked: why do state Attorneys General need the ability to file civil lawsuits under this bill, with a much lower standard to bring those suits?

Filed Under: cda 230, civil, grandstanding, intermediary liability, knowledge, sesta, should have known, state attorneys general

Leaked Emails Reveal MPAA Plans To Pay Elected Officials To Attack Google

from the holy-fuck dept

Okay, it's no secret that the MPAA hates Google. It doesn't take a psychology expert to figure that out. But in the last few days, some of the leaks from the Sony Pictures hack have revealed the depths of that hatred, raising serious questions about how the MPAA abuses the legal process in corrupt and dangerous ways. The most serious charge -- unfortunately completely buried by this report at The Verge -- is that it appears the MPAA and the major Hollywood studios directly funded various state Attorneys General in their efforts to attack and shame Google. Think about that for a second.

There's a lot of background here that's important (beyond just the MPAA really hates Google). First, as you know, the MPAA has certainly not given up on its SOPA desire to get certain websites completely blocked. The leaked emails reveal a lot more about that (which we'll get to). Second, a year ago, the MPAA hired a pitbull of an anti-piracy lawyer in naming Steve Fabrizio its General Counsel. Fabrizio has spent the last decade and a half or so deeply involved in litigating a bunch of anti-piracy battles at both the RIAA and the MPAA/RIAA's favorite big law firm, Jenner & Block. This is not a guy you hire if you're looking to innovate. This is a guy you hire if you want to get into knock-down, dirty legal fights.

Third, there is the role of state Attorneys General. A recent NY Times article detailed how lobbyists have figured out ways to effectively "lobby" state Attorneys General to do their bidding. Frequently, this is around getting the state AGs to drop investigations (and potential lawsuits) against companies. The article is somewhat eye-opening, as it's hard to distinguish much of what's discussed from straight up bribery. There is talk of lavish events, travel and dinners all paid for by corporate lobbyists for state AGs, often followed soon after with dropped, or reduced investigations. In one case, an AG told staff not to start an investigation into a public company without first getting his approval. Campaign funding is a big part of it as well, as these lobbyists dump lots of money into AG campaigns. And it's no secret that the state Attorney General position is often seen as a stepping stone to a Governorship or US Senate job.

We've discussed in the past that state Attorneys General are often the biggest grandstanders, as their main goal in certain investigations seems to be about generating headlines for themselves, rather than any real legal basis. More than four years ago, we wrote about Topix CEO Chris Tolles' experience being hounded by state Attorneys' General so they could get a bunch of headlines out of something in which everyone admitted Topix wasn't actually doing anything illegal. Along those lines, we've noted that popular tech companies have increasingly been a target for state AGs -- because they're almost sure to generate headlines. We've also noted that state AGs have been pushing for changes to federal laws, like Section 230 of the CDA, to allow them to further go after big tech companies for things like actions of their users.

Not surprisingly, Google has been a popular target for some state AGs. In the past, we've written about state Attorneys General from Nebraska and Oklahoma blaming Google for videos made by users, and about Texas' Attorney General going after Google for supposed antitrust violations (based on the same claims that the FTC later dropped entirely). But the state Attorney General with the biggest chip on his shoulder for Google has absolutely been Mississippi Attorney General Jim Hood, who seemed to think that it was Google's fault that he could find counterfeit goods via search. A few months later, he was back blaming Google for infringement online as well.

This was no accident. What's come out of the Sony Pictures Leak is not just that the MPAA was buddying up to state Attorneys General, but that the MPAA was funding some of this activity and actively supporting the investigation. The leaked emails reveal that rather than seeing that NY Times article about corporate/AG corruption as a warning sign, the MPAA viewed it as a playbook. But not for preventing investigations but for encouraging and funding them. This appears to go way beyond that NY Times article. This isn't campaign donations or inviting AGs to speak at lavish events and paying for the travel. This is flat out paying AGs to investigate Google (even on issues unrelated to copyright infringement) and then promising to get extra press attention to those articles.

Here's the Verge's summary of a key email (which the Verge doesn't even seem to realize why it's so damning):

May 8, 2014: Fabrizio to group. "We’ve had success to date in motivating the AGs; however as they approach the CID phase, the AGs will need greater levels of legal support." He outlines two options, ranging from $585,000 to $1.175 million, which includes legal support for AGs (through Jenner) and optional investigation and analysis of ("ammunition / evidence against") Goliath. Both options include at least $85,000 for communication (e.g. "Respond to / rebut Goliath's public advocacy, amplify negative Goliath news, [and] seed media stories based on investigation and AG actions.").

"Goliath" is the MPAA's rather transparent "codename" for Google. CID stands for a "civil investigative demand" -- which is a form of an administrative subpoena, demanding information from a company, related to an investigation.

What seems to come out from these emails is that the MPAA, in coordination with the major Hollywood studios, agreed to willfully pay tons of money indirectly to state AGs (and Hood in particular) to get them to investigate Google (using the time and labor of the MPAA's favorite law firm -- and the one that Fabrizio just left). That goes way beyond anything discussed in that NY Times articles, and certainly smacks of serious illegality. It's difficult to see how this isn't bribing a public official to attack a company they dislike.

Not only that, but it shows that the MPAA and the studios were aware of Hood's plans well before they happened, suggesting that he or his office has been coordinating with Hollywood on their plans and that the specific CIDs are actually written by the MPAA's lawyers themselves:

A report from the previous February suggests that the Goliath group drafted civil investigative demands (similar to a subpoena) to be issued by the attorneys general. "Some subset of AGs (3-5, but Hood alone if necessary) should move toward issuing CIDs before mid-May," the email says.

And, more recent emails (from just in October) show that they know that another CID is apparently coming and that the MPAA intends to use that CID for negotiating leverage against Google. This follows a claim that Google was pissed off at the MPAA for mocking its recent search algorithm changes to further push down sites that may link to infringing materials (it's not like we didn't warn everyone that the MPAA wouldn't be satisfied with Google's changes). Either way, the MPAA's Fabrizio brushes off concerns that Google has, telling the studios not to worry, that Google should be more willing to talk after Hood sends out his next CID:

After a dispute over Google’s most recent anti-piracy measures in October, Fabrizio suggested further action may be yet to come. "We believe Google is overreacting — and dramatically so. Their reaction seems tactical (or childish)," the email reads. "Following the issuance of the CID [civil investigative demand] by [Mississippi attorney general Jim] Hood (which may create yet another uproar by Google), we may be in a position for more serious discussions with Google."

While the Verge report is focused on the "sexy" topic of the MPAA having an "anti-Google' (er... "Goliath") working group, the real story here is that it appears that this infatuation with taking down Google has extended to funding state politicians in their investigations and attacks on Google, even when it's on totally unrelated issues (the initial CID was about counterfeit drugs -- which is an issue that the MPAA likes to mock Google over by totally misrepresenting some actual, but historical, bad behavior).

And beyond that, the MPAA is showing that part of its plan is to fund "media stories based on" the Attorneys General investigations. Remember, so much AG activity these days is driven by what's going to get them into the headlines. Setting aside nearly $100,000 from the MPAA to get a state AG some headlines for an investigation paid for by the MPAA, using administrative subpoenas written by the MPAA... all designed to attack a company they don't like (which actually has done pretty much exactly what they'd been asking for in downranking sites that lead to infringing works), is really stunning.

I get that it's natural to dislike a company or organization that has undermined your business model. It happens. But there are different ways to respond to it. One is to innovate and compete. Another is to use the legal process to throw hurdles in their path. This is the distinction between "market entrepreneurs" and "political entrepreneurs" that Andy Kessler has described. What the MPAA appears to have done in the last few months, however, certainly suggests that the organization, with the help of the major studios, went beyond just lobbying and political pressure, to actually funding elected officials to try to attack a company they didn't like. And, at the very least, this also has to raise serious questions about Mississippi Attorney General Jim Hood and who he takes orders from. Is he really "protecting" the people of Mississippi? Or is he focused on gobbling up Hollywood's money and promotion?

Filed Under: corruption, emails, hack, jim hood, lobbying, state attorneys general, steve fabrizio
Companies: google, mpaa, sony