On Wednesday, Judge Cronan dismissed with prejudice X Corp.’s complaint against Letitia James, in her official capacity as Attorney General of New York, for failure to state a claim. X Corp. alleged that the Content Category Report Provisions of New York’s Stop Hiding Hate Act, which require X to publicly disclose its content-moderation policies, violate X’s First Amendment rights.
Continue Reading Judge Cronan: First Amendment “Poses No Obstacle” to New York Requiring Disclosure of X’s Content-Moderation Policies
Judge Buchwald: Online Staffing Agency’s “Drip Pricing” Model of Adding Service Fees at Check Out Is Not Deceptive
On Friday, Judge Buchwald dismissed a proposed class action against online staffing agency Fiverr, an online platform connecting freelance service providers to customers. Three individuals alleged that Fiverr’s presentation of service fees is a deceptive practice under New York and California law. The plaintiffs claimed to have searched for and selected the services of a specific freelancer based on the pricing shown on the freelancer’s Fiverr page, only to be surprised by the addition of Fiverr’s service fee on the final checkout page.
The plaintiffs characterized Fiverr’s pricing as “drip pricing”, which they defined as “displaying one price for a good or service before adding one or more mandatory fees shortly before the consumer completes the transaction.” In recent years, the Federal Trade Commission has cracked down on “drip pricing”, also called “bait and switch pricing”, in the event ticket and rental housing markets.
Continue Reading Judge Buchwald: Online Staffing Agency’s “Drip Pricing” Model of Adding Service Fees at Check Out Is Not DeceptiveReddit Sues Perplexity AI and Data Scrapers for “Industrial-Scale” Theft of “Valuable Copyrighted Content”
On Wednesday, Reddit Inc. sued Perplexity AI and three “data scrapers,” alleging the companies are circumventing its technological safeguards to unlawfully acquire Reddit’s copyrighted data to “feed” Perplexity’s artificial intelligence model.
Reddit is one of the largest online discussion platforms in the world and “comprises nearly two decades of human conversational data organized across interest-based, user-created communities (referred to as “subreddits”) spanning subjects on virtually every topic imaginable.” According to Reddit, this human-generated content is “widely seen as invaluable to AI companies,” who require a consistent source of new data to “train and operate their AI products.” Reddit “does not permit unauthorized commercialization of Reddit content absent an express agreement with guardrails in place to ensure that Reddit and its users’ rights are protected.”
Continue Reading Reddit Sues Perplexity AI and Data Scrapers for “Industrial-Scale” Theft of “Valuable Copyrighted Content”Judge Torres Issues TRO Against Sellers of Infringing Concert Merchandise
Last week, Judge Analisa Torres issued a temporary restraining order, seizure order, and order to show cause against unidentified sellers of counterfeit tour merchandise ahead of a Benson Boone concert at Madison Square Garden. Plaintiff Ceremony of Roses Acquisition LLC (“Ceremony of Roses”) alleges that it possesses the exclusive right to sell merchandise bearing Benson Boone’s federally registered trademarks, and highlighted in its moving papers that similar seizure orders had issued ahead of tours from other artists, including Harry Styles, Nicky Manaj and the Jonas Brothers.
Continue Reading Judge Torres Issues TRO Against Sellers of Infringing Concert MerchandiseJudge Broderick Refuses To Stay Discovery in Suit Against Major League Baseball
On Thursday, Judge Vernon S. Broderick denied Major League Baseball’s motion to stay discovery in a sexual harassment and gender bias lawsuit filed by two aspiring umpires employed by MLB. The prospective umpires’ second amended complaint, filed in November, asserts hostile-work-environment, wrongful termination, and retaliation claims under the New York State Human Rights Law, the New York City Human Rights Law, and Title VII of the Civil Rights Act. In December, MLB filed a motion to dismiss certain of the plaintiffs’ claims, to sever plaintiffs’ claims, and to transfer each plaintiff’s remaining claims out of the Southern District of New York.
On January 3, MLB filed a motion to stay discovery in the case, arguing that its motions to dismiss, sever and transfer provided sufficient grounds on which to pause discovery until the motions were decided. Judge Broderick denied MLB’s motion to stay, finding that MLB had not shown good cause to pause discovery.
Continue Reading Judge Broderick Refuses To Stay Discovery in Suit Against Major League BaseballCopyright Infringement Lawsuits Against OpenAI and Microsoft Are Mounting
In two complaints filed last week, The Intercept Media, Inc, Raw Story Media, Inc. and AlterNet Media, Inc. became the latest companies to sue OpenAI for copyright infringement in violation of the Digital Millennium Copyright Act. The Intercept also included Microsoft as a defendant.
Both complaints were filed by self-identified “news organizations,” and allege that those organizations’ copyrighted works were used to train OpenAI’s generative AI systems, ChatGPT, on how to mimic human speech and writing. According to the news organizations, when deciding what information to include in the training materials fed to ChatGPT:
Continue Reading Copyright Infringement Lawsuits Against OpenAI and Microsoft Are MountingAuthors Guild and 17 Well-Known Authors Claim OpenAI Infringes Their Copyrighted Works
Last Tuesday, the Authors Guild and 17 authors, including George R.R. Martin, Jonathan Franzen, Elin Hilderbrand, John Grisham and Jodi Picoult, filed a proposed class action complaint against OpenAI, alleging direct, vicarious and contributory copyright infringement. The Plaintiffs seek “redress for Defendants’ flagrant and harmful infringements of Plaintiffs’ registered copyrights in written works of fiction.”
Plaintiffs’ complaint alleges that:
Continue Reading Authors Guild and 17 Well-Known Authors Claim OpenAI Infringes Their Copyrighted WorksJudge Castel Sanctions Lawyers Who Submitted Fake Cases Generated By ChatGPT
On Thursday, Judge Castel sanctioned two lawyers and their law firm $5,000 in connection with their widely publicized submission of fake cases generated by ChatGPT.
The relevant events began on March 1, when the plaintiff’s lawyers submitted an “affirmation” in opposition to the defendant’s motion to dismiss, which first cited the fake cases. On March 15, the defendant a reply brief questioning the existence of many of the cases cited in plaintiff’s “affirmation.”
After reading the reply and being unable to locate a number of the cases himself, Judge Castel ordered plaintiff’s lawyers to produce the cases cited in their opposition. Plaintiff’s counsel submitted an affidavit attaching the excerpts of the “cases” on April 25th. Judge Castel reviewed the “purported decisions” and described them as showing “stylistic and reasoning flaws that do not generally appear in decisions” from federal courts and containing legal analysis that was “gibberish.” On May 4, he ordered plaintiff’s lawyers to show cause why they should not be sanctioned. On May 25, one of the lawyers finally admitted that he had used ChatGPT to conduct his legal research, not understanding that it could invent fake cases.
Continue Reading Judge Castel Sanctions Lawyers Who Submitted Fake Cases Generated By ChatGPTSecond Circuit, Reversing Judge McMahon’s Order, Affirms Purdue Pharma Bankruptcy
Yesterday, the Second Circuit overturned Judge McMahon’s December 2021 decision rejecting the Purdue Pharma bankruptcy on the grounds that the Bankruptcy Code did not permit releases of third-party direct claims against non-debtors. As we previously covered, Judge McMahon’s opinion found that the bankruptcy court lacked authority to issue releases in favor of the Sackler family.
While acknowledging that both sides put forth arguments “about fairness and accountability, particularly as it relates to the Sacklers, in releasing parties from liability for actions that cause great societal harm” the Second Circuit concluded that the only questions it needed to resolve were (1) whether the Bankruptcy Code permits nonconsensual third-party releases of direct claims against non-debtors, and (2) if so, were such releases proper here in light of all equitable considerations and the facts of this case. The Court answered both questions in the affirmative:
Continue Reading Second Circuit, Reversing Judge McMahon’s Order, Affirms Purdue Pharma BankruptcyJudge Vyskocil Denies DA Bragg’s Request to Enjoin Pomerantz’s Testimony, but Second Circuit Grants Stay Pending Appeal
On Wednesday, Judge Vyskocil denied a request by Manhattan District Attorney Alvin Bragg for a TRO enjoining the enforcement of the subpoena issued to Mark F. Pomerantz by Congressman Jim Jordan in his role as Chair of the House Committee on the Judiciary. We previously covered DA Bragg’s TRO and Complaint here.
Before addressing the merits of the TRO request, Judge Vyskocil faulted DA Bragg for filing the order to show cause for the TRO without notice to Defendants and before serving them with the Complaint. She characterized the first 35 pages of the Complaint as “nothing short of a public relations tirade against former President and current presidential candidate Donald Trump,” before concluding “that this action is merely a motion to quash a subpoena dressed up as a lawsuit.”
Continue Reading Judge Vyskocil Denies DA Bragg’s Request to Enjoin Pomerantz’s Testimony, but Second Circuit Grants Stay Pending Appeal