Archives for December 2014

Attorney’s Intrusion on Seclusion and Cyberstalking Claims Against ‘Above the Law’ Blog Dismissed – IL ND

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In Huon v. Breaking Media, LLC, 2014 WL 6845866 (N.D.Ill. 2014), an Illinois attorney sued law blog Above the Law (ATL) and womens’-interest blog Jezebel.com, for reporting on the plaintiff’s arrest and subsequent trial on sexual assault and witness intimidation charges.

The plaintiff was criminally charged after he met a woman responding to a Craigslist ad where the plaintiff claimed he was a talent scout for a modeling agency.  (Now that doesn’t sound sketchy at all!!) (Cough.)

While the sex assault charge was pending, the plaintiff was separately accused of witness tampering.  The plaintiff was eventually acquitted of both charges after a three-day trial.

Plaintiff sued the two blogs after they published articles discussing the charges’ underlying allegations and the eventual trial result.

The plaintiff claimed the various blog articles and some hostile user/reader comments to the articles impugned his integrity causing him to lose clients. The plaintiff sued for various privacy tort and cyberbullying claims and the blog defendants moved to dismiss all counts. The Northern District dismissed most of the plaintiff’s claims.

Rules/Reasoning:

Intrusion on Seclusion

To state a claim for this tort, the plaintiff must allege (1) an unauthorized intrusion or prying into a plaintiff’s seclusion; (2) the intrusion is highly offensive or objectionable to a reasonable person; (3) the matters upon which the intrusion occurred were private; and (4) the intrusion caused anguish and suffering.

Prototypical examples of this tort include opening a person’s mail, searching someone’s wallet or safe and reviewing a person’s banking information. *14.

The court found that Plaintiff’s intrusion on seclusion claim based on user comments to the defendants’ article were protected by the Communications Decency Act, 47 U.S.C. 230(c)(1)(CDA), a statute that immunizes websites that simply republish information supplied by third parties.

Since the user comments – while offensive – couldn’t be attributed to the defendants under the CDA, the intrusion claim failed.  The court noted that in relation to the readers who posted comments on the blog articles, the defendants were simply “online information systems” that are not publishers under the CDA (see 47 U.S.C. 230(f).

Plaintiff’s argument that the blog defendants “incited” offensive user comments also failed. The court found that a website doesn’t incite unlawful comments simply by providing a forum for content. In addition, both defendants had detailed written policies that outlawed defamatory comments. Taken together, these facts defeated plaintiff’s “incitement” arguments. **4-5

The Court also dismissed the intrusion claim since the plaintiff at most alleged irresponsible (“shoddy”) journalism practices. He didn’t plead that either defendant pried into his personal affairs or violate any of his physical boundaries – an indispensable aspect of the intrusion tort. *14.

Intentional Infliction of Emotional Distress

This claim also failed.  An intentional infliction plaintiff must demonstrate (1) extreme and outrageous conduct that goes beyond all bounds of decency in a civilized community, (2) the defendant intended to inflict severe emotional distress on the plaintiff or know there was a high probability that the conduct would cause severe emotional distress; and (3) the conduct must in fact cause severe emotional distress.

Where intentional infliction is premised on published statements, if those statements don’t rise to the level of defamation, they necessarily can’t meet the even higher extreme and outrageous standard. *15

Here, the claims against the Jezebel blog defendants didn’t rise to the level of libel or extreme and outrageous conduct since the Jezebel posts were protected by the fair reporting privilege and because some of the content consisted of opinions, not facts.

But plaintiff did state a colorable intentional infliction claim against ATL for falsely reporting that plaintiff was charged with sexual assault twice (instead of once). 

ATL’s false statement that plaintiff had multiple sex assault arrests was defamatory per se – a false statement imputing the commission of a crime – plaintiff adequately alleged a cause of action for intentional infliction of emotional distress against ATL (as well as defamation).

Take-aways:

– Intrusion on Seclusion requires physical invasion of the plaintiff’s space or private domain;

– An online republisher isn’t responsible for provocative reader comments where it has written policies that outlaw offensive content;

Inaccurate reporting doesn’t rise to the level of intrusion on seclusion or intentional infliction of emotional distress;

 

 

 

 

Recovering Court Costs In Illinois Litigation – What’s Covered?

a-very-upset-aol-salesperson-just-called-us (photo credit: www.businessinsider.com)

 Huang v. CNA, 2012 Ill. App. 1st 1112243-U provided a useful discussion of recoverable court costs in the context of a malicious prosecution suit.

To prove malicious prosecution, a plaintiff must show (1) the commencement or continuance of a criminal or civil proceeding; (2) the proceeding terminated in the plaintiff’s favor; (3) absence of probable cause; (4) malice; and (5) damages.

If the defendant had probable cause to sue or to file criminal charges, regardless of whether the suit or charges was successful, this will completely defeat a malicious prosecution claim.

“Probable cause” in the context of dropped criminal charges means a state of facts that would lead a person of ordinary caution and prudence to believe – or to have a strong suspicion – that the person committed a crime.

The key inquiry is on the state of mind of the one commencing the prosecution, not the actual facts of the case or whether the accused was guilty or innocence, that determines probable cause. As long as there is a an “honest belief” that the accused is probably guilty of an offense, the probable cause standard is met (and a malicious prosecution claim will fail). ¶ 40.

Here, the evidence reflected the defendant’s probable cause for charging the plaintiff with trespassing: He refused to leave the premises after his employer fired him.  The Illinois Criminal Code defines trespassing as a person remaining on the land of another, after receiving notice from the owner or occupant to depart. 720 ILCS 5/21-3(a)(3).

Based on the evidence that the plaintiff was belligerent and insistent (on staying), the court found the defendant had a reasonable basis to charge the fired employee plaintiff. ¶¶ 42-45.

The next issue grappled with by the court concerned what costs could the defendant employer recover after defeating plaintiff’s claims. Code Section 5-108 and 109 (735 ILCS 5/5-108, 5-109) work in tandem to govern recoverable costs in litigation.

Code Section 5-109 allows the winning party to recover costs. Case law interprets Section 5-108’s “court costs”  to encompass filing fees, subpoena fees and statutory witness fees. While court costs are recoverable, “litigation costs” (e.g. photocopying, research costs, etc.) generally are not.

Supreme Court Rule 208(d) also gives the trial court discretion to tax deposition costs where the deposition is “necessarily used at trial.” But where a case is disposed of before trial (like on a motion for summary judgment or dismissal), deposition costs aren’t properly taxed to the losing party. ¶¶ 49-50.

Here, the court affirmed the filing fees and subpoena fees but reversed the cost award for defendant’s depositions. Since there was no trial, the defendant’s deposition costs shouldn’t have been assessed against the plaintiff.

Take-aways:

– To establish probable cause in a malicious prosecution case, a defendant only needs to show an objective, honest belief that the plaintiff committed a crime;

– Deposition costs can be recovered by a winning litigant but only where the deposition is necessarily and actually used at trial;

– If a case is disposed of on a summary judgment or dismissal motion, the winner only can recover court filing fees, service/sheriff fees and subpoena costs.

 

Unconscionability: Substantive and Procedural – Illinois Case Snapshot

The Case: Rosenbach v. NorStates Bank, 2014 IL App (2d) 131162-U

Facts Summary: Plaintiff LLC member who guaranteed commercial real estate loan sues the lender after lender makes (allegedly) unauthorized loan advances, declares a default against the LLC and seizes over $200,000 of the plaintiff’s personal funds that were pledged to induce the loan to the LLC.  Plaintiff’s claims are for breach of contract and a declaratory judgment action seeking ruling that the commercial guaranty is unconscionable under Illinois law.

Procedural History: Lender moves to dismiss on dual bases that (1) plaintiff’s injury is derivative of injury to the LLC borrower; and (2) commercial guaranty is not procedurally or substantively unconscionable.  Trial court grants motion and plaintiff appeals.

Result: Trial court’s dismissal upheld.  Lender wins, plaintiff LLC member/guarantor loses.

Operative Rules:

To defeat a guaranty claim, a guarantor must establish he suffered a direct injury as a result of a lender’s breach; as opposed to injury that is derivative of the injury suffered by the borrower.  So, if a corporate borrower is damaged due to a lender’s breach, the borrowing entity has a right to sue; not a constituent (individual) member of that borrower (e.g. an officer, shareholder, employee, etc.);

Illinois’ declaratory judgment statute allows a court to make binding declarations of rights in cases where the parties’ dispute has crystallized and they have reached an impasse.  The “dec action” plaintiff must show (1) a tangible legal interest in the subject of the suit; (2) a defendant with an opposing interest to plaintiff’s; and (3) an actual controversy between the parties. 735 ILCS 5/2-701(a);

Illinois recognizes (a) procedural unconscionability; and (b) substantive unconscionability.  The former means there is unfairness during the contract formation stage that deprives one of the parties of freedom of choice.  The latter (substantive unconscionability) looks to the terms of a contract and whether they are so one-sided that they oppress or unfairly burden an innocent party and show an imbalance in obligations among the contracting parties.

Procedural unconscionability factors include whether each party had a chance to understand the terms of the contract, whether key terms were hidden amid “a maze of fine print” and any other circumstances surrounding contract formation.

¶¶ 20-28, 31-35

Application:

Plaintiff’s claimed injuries in the breach of guaranty count were purely derivative of the LLC borrower’s.  The extent of plaintiff’s liability to the lender defendant was tied directly to the borrowing entity’s liability to the lender defendant.  There were no facts pled that showed plaintiff would have any different (in nature or amount) liability to defendant than the underlying corporate borrower.

The court held that loss of a guarantor’s investment is a derivative injury, not a direct one.  As a result, plaintiff’s claims were defeated since he failed to plead a direct (as opposed to flow-through) injury as the result of any lender conduct.

The plaintiff’s unconscionability arguments also failed.  The plaintiff only made conclusory allegations that the guaranty was a pre-printed document, drafted by the lender who had a superior bargaining stance compared to the plaintiff.  These blanket allegations weren’t enough though to show a defect during the formation and execution of the guaranty.

The court also held that even if the guaranty was procedurally unconscionable, the plaintiff would still have to show sustantive unconscionability – that the guaranty terms were inordinately one-sided in favor of the lender (and against the plaintiff) that no court could fairly enforce the guaranty.

Here, the court allowed that the guaranty definitely did favor the lender and the lender was probably in a stronger contracting position than the plaintiff.  Still, the terms weren’t so one-sided that the court should abstain from enforcing them.  In rejecting the plaintiff’s substantive unconscionability argument, the court also cited the fact that the guaranty terms weren’t hidden or hard to understand or any unfair surprise.

Afterwords:

Individual guarantor of a corporate borrower must show separate and distinct injury from the corporate borrower to have standing to sue a lender for breach;

A sophisticated borrower will likely need to show both procedural (formation defects) and substantive unconscionability (unfair or one-sided contract terms) to free himself from a contract he willingly signed.