Tuesday, August 14, 2012

Do you know more about endorsements than large companies and law firms?

Bloggers and other reviewers all seem to know they need to pay attention to the FTC Endorsement Guides. Maybe large companies haven't quite gotten the message? That seems to be the suggestion of at least one Federal District Judge.

Some background. Google and Oracle have been going at it for a while about whether Android infringes on software copyrights patents owned by Oracle and implemented in Java. Google came out (mostly) the victor. But there's some post-trial matters still to be addressed and so the trial judge, Judge William Alsup in the Northern District of California, still has jurisdiction over the case.

In an order handed down on August 7, Judge Alsup ordered each of Google and Oracle to produce a statement "clear[ly] identifying all authors, journalists, commentators or bloggers who have reported or commented on any issues in this case and who may have received money (other than normal subscription fees) from the party or its counsel during the pendency of this action."

If you've read any comments on the FTC Endorsement Guides, these issues should sound familiar. (If not, I've helpfully put a link to a prior post in the footer.) But this goes far beyond bloggers, and it's not under the jurisdiction of the FTC. And it's likely to be much more important.

I have to describe a bit of "inside baseball" here. Despite the fact that they are people like you and me, judges aren't allowed to use their own personal knowledge to interpret the facts of a trial, except for commonly-known or trivial facts of which they can take judicial notice (e.g. that a car ordinarily has 4 wheels). For everything else, if the lawyers want to get information specific to their point of view in front of the judge, they have to provide information to the judge. There are two principal ways to do this.
  1. Parties can point the judge to other cases that have been on the same topic ("precedents") to show the judge that the law is on their side. Where there are no cases directly on topic or where the cases go against them, they can submit books, articles from law reviews, and other sources. And the rules are pretty strict saying that you can't subpoena the authors of books and articles to testify about whether or not they are experts in anything. Judges take their arguments at face value: they might decide not to listen to them, but they stand on their own. 
  2. Parties can also hire expert witnesses. There are special rules about expert witnesses. They have to prove that they are experts in the field. They have to disclose how much money they are paid. They have to file a special type of report. They have to be made available to be deposed by the other side. And all of this has to be disclosed to the judge and the other side well before the trial.

It seems like Judge Alsup may have seen that are loopholes in each part of this system:
  1. It's tough to bribe a judge so giving a judgment is probably safe. But if a party pays an author to write a book or an article, then that's not an objective source. The judge and the other party should therefore get to know about this because it could affect their assessment of the information. If the judge knew the law review article espousing the same position as the plaintiff was only written after the author got a $100K payment from the plaintiff, that should matter.
  2. Once you submit the article as a reason that a judge should rule in favor of one side of a lawsuit, here's no real difference between an author paid to write an article for a magazine and an expert witness. So the rules for expert witnesses should apply to those paid authors. But right now they don't.

The statements are due on August 17, 2012, and I'll be watching for them with interest. There's often nothing illegal about paying for content. But right now outside of the FTC issues people see this as just a contract or code of ethics issue: the FTC only oversees things like misleading consumers, but there's no consumers being misled in a court case. Judge Alsup is saying these issues apply in the courts as well.

PaidContent analysis of order (including embed of text):
Prior Legal Minimum post on FTC Endorsement Guides:

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