Mealey's Cyber Tech & E-Commerce : Mealey's : Legal News & Analysis

Mealey's Cyber Tech & E-Commerce

August 09, 2024
Class Suit Filed Against Delta Over CrowdStrike Crash Causing Flight Cancellations

ATLANTA — Delta Air Lines passengers whose flights were canceled as a result of an automatic update to CrowdStrike’s cybersecurity software that caused computers, including those used by Delta, to crash filed a putative class action suit in a Georgia federal court, asserting that Delta violated its policies to provide flight refunds, hotel accommodations and related expenses when flights were canceled by breaching its contract with customers, resulting in them spending additional funds for alternative transportation methods.
August 09, 2024
Judge Denies Roblox’s Bid To Arbitrate Couple’s ‘Child Exploitation’ Claims

SAN FRANCISCO — A California federal judge on Aug. 8 denied online video game developer Roblox Corp.’s motion to compel arbitration of putative class claims that it violates California’s unfair competition law (UCL) and other laws by intentionally addicting children to its online game, which requires purchases of in-game currency to play, writing that Roblox did not show that the parents who filed the suit ever read or consented to its arbitration agreement.
August 09, 2024
Magistrate Judge: Crypto Exchange Not Subject To U.S. Securities Laws

AUSTIN, Texas — A federal magistrate judge in Texas recommended that a putative class complaint brought by investors who say an online crypto asset exchange and its organizers misled them by saying their investment was risk free should be dismissed without prejudice, writing that the complaint should proceed in an Israeli court because the crypto organization is registered as an entity in Israel and lacked sufficient contact with the United States.
August 08, 2024
Federal Judge Orders $125M Civil Penalty Against Crypto Firm In SEC Enforcement

NEW YORK — A crypto asset firm will be required to pay more than $120 million as a civil penalty after a New York federal judge on Aug. 7 granted the Securities and Exchange Commission’s motion for entry of final judgment on the commission’s allegations that cryptocurrencies sold by the firm were effectively unregistered securities.
August 08, 2024
Impacted Air Travelers Sue CrowdStrike For Causing ‘Catastrophic’ Outage

AUSTIN, Texas — A group of airplane travelers filed a putative class complaint in Texas federal court against tech company CrowdStrike Inc. accusing it of harming them by failing to properly test its cybersecurity software before issuing an update that allegedly caused 8.5 million computers and devices to go offline, including at airports, delaying their flights in violation of California’s unfair competition law (UCL) and other laws.
August 08, 2024
Restaurants’ Lanham Act Claims Against Grubhub Largely Survive Dismissal Motion

CHICAGO — A federal judge in Illinois said seven of nine restaurants who brought trademark violation claims in a putative class complaint against Grubhub Inc., alleging that the company included their names and logos on its food delivery app without the restaurants’ permission, failed to show that they have a protectible trademark interest, while the claims from the remaining two restaurants are adequately pleaded.
August 07, 2024
D.C. Circuit Affirms Finding That DMCA Does Not Run Afoul Of 1st Amendment

WASHINGTON, D.C. — A District of Columbia Circuit U.S. Court of Appeals panel rejected two technologists’ challenge to the constitutionality of certain provisions of the Digital Millennium Copyright Act (DMCA), holding that a federal district court rightly enforced the statute’s anti-circumvention provision with regard to technological protection measures (TPMs).
August 06, 2024
Twitter: High Court Rulings Show Lower Court Correctly Tossed Free Speech Claims

PASADENA, Calif. — In a supplemental brief filed in the Ninth Circuit U.S. Court of Appeals, Twitter argues that recent U.S. Supreme Court First Amendment rulings finding that private conduct can be “attributable to the government” only when the private party’s decision relates to “government coercion” support its argument that a district court correctly dismissed claims by former President Donald J. Trump and other Twitter users because they failed to allege that suspension of their accounts was a “state action.”
August 06, 2024
Judge Finds Google Liable For Market Monopoly In Sherman Act Antitrust Suit

WASHINGTON, D.C. — A District of Columbia federal judge ruled Aug. 5 that Google violated Section 2 of the Sherman Act by keeping “its monopoly in two product markets in the United States — general search services and general text advertising — through its exclusive distribution agreements,” but that “Google lacks monopoly power in the market for search ads.”
August 06, 2024
Judge Won’t Rethink Partial Dismissal Of Stock Drop Suit Against AI Lending Firm

CINCINNATI — A federal judge in Ohio on Aug. 5 denied a lending platform’s motion to reconsider a ruling that claims made by shareholders about the platform’s use of artificial intelligence to approve loans are actionable, holding that the lending platform incorrectly argued that the investors’ inability to establish a single factor in a multi-factor test to determine scienter “is so essential that its inapplicability is fatal to Plaintiffs’ claims.”
August 05, 2024
DOJ Complaint Accuses ByteDance, TikTok Of Violating Children’s Privacy Laws

LOS ANGELES — The United States filed a complaint Aug. 2 in a federal court in California accusing TikTok Inc., ByteDance Ltd. and their affiliates of violating the Children’s Online Privacy Protection Act (COPPA) and its implementing regulations as well as a 2019 court order by knowingly permitting children to create regular rather than “Kids Mode” TikTok accounts and to create, view and share videos and messages with adults.
August 02, 2024
Panel Remands In $2B Jury Verdict Appeal Over Software’s ‘Stolen’ Trade Secrets

RICHMOND, Va. — A Virginia appellate court reversed a lower court’s judgment and remanded for a new trial after a jury awarded $2,036,860,045 to Appian Corp., a software company offering business process management (BPM) software that sued BPM competitor Pegasystems Inc., alleging that Pega engaged in corporate espionage to steal Appian’s trade secrets, finding that because the lower court “committed a series of errors,” the judgment must be reversed.
August 01, 2024
Judge: Republicans’ UCL Suit Viable Against Google, But Fails On Merits

SACRAMENTO, Calif. — A California federal judge in a mixed ruling on July 31 found that Google LLC cannot claim immunity as an online publisher from claims that it violated California’s unfair competition law (UCL) by diverting Republican National Committee (RNC) fundraising emails to users’ spam folders but granted Google’s motion to dismiss on the merits.
July 31, 2024
Investor: CrowdStrike Misled Investors About Testing Before Global Tech Outage

AUSTIN, Texas — A retirement system says in a putative class complaint filed on July 30 in a Texas federal court that a cybersecurity company and certain of its executives issued misleading claims to investors about its internal testing systems before a recent software glitch caused a global outage of computers on the Microsoft Windows operating system, leading to a steep drop in value for the company’s stock.
July 26, 2024
COMMENTARY: Cyber War Exclusions

By Peter A. Halprin and Brittany Parks
July 30, 2024
6th Circuit Hears Arguments On State-Action Dispute Over Deleted Facebook Posts

CINCINNATI — On remand from the U.S. Supreme Court, which ruled that the state-action doctrine requires showing that an official has the authority to speak on behalf of the entity he represents and exercised that authority, the Sixth Circuit U.S. Court of Appeals on July 29 heard oral arguments in a dispute over whether a public official’s deleting posts from his personal Facebook account where he posted about his job constitutes state action.
July 30, 2024
Judge Rejects ‘Unconscionable’ Arbitration Of Class Suit Against Gaming Company

SAN FRANCISCO — A California federal judge denied a gaming company and its co-founders’ motion to compel arbitration of putative class claims against them for violating California’s unfair competition law (UCL) and other laws by falsely advertising their mobile games as offering live competition, finding that the arbitration agreement contained provisions that would likely cause “years” of delay.
July 30, 2024
Meta Will Pay $1.4 Billion To Settle Texas’ Biometric Data Privacy Lawsuit

MARSHALL, Texas — Meta Platforms Inc., formerly known as Facebook Inc., will pay $1.4 billion to end claims by Texas that it captured and used the personal biometric data of millions of state residents, according to an agreed final judgment filed in a Texas court on July 30.
July 30, 2024
Federal Circuit: Regulation Applies To Amended Claims In Internet Patent Dispute

WASHINGTON, D.C. — In a dispute between a software company and Apple and Motorola over a patent regarding how internet content is displayed on mobile devices, the Federal Circuit U.S. Court of Appeals upheld the Patent Trial and Appeal Board’s determination that a regulation addressing estoppel provisions in patent office proceedings is valid but vacated and remanded the board’s decision in two reexamination proceedings for it to reconsider the regulation’s application to previously issued claims.
July 29, 2024
Student-Athletes Seek Preliminary Approval Of $2.5B NIL Settlement

OAKLAND, Calif. — College athletes who have accused the National Collegiate Athletic Association (NCAA) and five conferences of violating the Sherman Act by restricting compensation for the commercial use of their names, images and likenesses (NIL) filed a motion July 26 in a federal court in California for preliminary approval of a $2,576,000,000 settlement, which the players say will “reshape the economic landscape of college sports.”
July 26, 2024
Judge Refuses To Toss Dispute Between Disney And Actor Over Social Media Posts

LOS ANGELES — A California federal court judge denied Disney’s motion to dismiss a wrongful discharge case filed by an actor who was fired from the Disney+ show The Mandalorian purportedly due to the posts she made on social media platforms, including X, formerly known as Twitter, and Instagram, finding that Disney failed to show that it engaged in expressive association that is protected under the First Amendment.
July 26, 2024
In 1st Impression Case, Panel Says Snapchat, Meta Must Provide Subpoenaed Info

SAN DIEGO — In a case of first impression, a California appellate court granted petitions for writs of mandate, ruling that the Stored Communications Act’s (SCA) disclosure limitations are inapplicable to bar compliance with subpoenas requesting access to social media posts made by a murder victim on Facebook and Snapchat because the platforms’ decisions to access their “users’ communications” puts them outside the SCA’s disclosure limitations.
July 25, 2024
Hospice Files Defamation Suit Against Anonymous Google Reviewers

LOS ANGELES — Alleging that it is being targeted by a business competitor who has “coordinated” the posting of “fake” negative reviews online, a hospice filed a lawsuit in California state court asserting claims against 1,000 John Does who posted the negative reviews for defamation and violation of California’s unfair competition law (UCL).
July 23, 2024
Magistrate Grants Adult Video Company’s Bid To Serve ISP In Illegal Download Row

ORLANDO, Fla. — A Florida federal magistrate judge on July 22 granted in part a motion filed by an adult video company to serve the internet service provider (ISP) of an unknown defendant accused of copyright infringement related to alleged illegal downloading and distributing of the video company’s content, finding that because serving the ISP is necessary for the company to proceed in this case, the company may serve the ISP with specified protections regarding identifying information.
July 22, 2024
9th Circuit Hears Arguments On X Corp.’s Appeal As To Social Media Moderating Bill

SAN FRANCISCO — The Ninth Circuit U.S. Court of Appeals heard oral arguments in an appeal by X Corp., formerly known as Twitter Inc., of a district court order denying its request for a preliminary injunction to enjoin the enforcement of California legislation requiring social media companies to post their terms of service reports twice a year, which X Corp. argues violates its free speech rights.